News

School district criticizes county's Stanford housing study

Board member: Permit plan would add students, leading to spike in annual unfunded costs

The Palo Alto school board backed on Tuesday a strongly worded letter that calls a new Santa Clara County draft environmental impact report on Stanford University's planned expansion "legally inadequate."

The letter, penned by an outside attorney, blasts the county for failing to fully "inform the public and public agencies like PAUSD about the project's environmental impacts" in the updated environmental impact report (EIR), which the Santa Clara County Department of Planning and Development released in June.

"PAUSD requests that the county revise the draft EIR to identify and mitigate all of the project's environmental impacts and that the county recirculate the entire draft EIR so that the public has the opportunity to understand and meaningfully comment on the project's environmental effects," attorney Karen Tiedemann of Oakland firm Goldfarb & Lipman wrote in the district's draft letter.

Stanford is seeking a new general use permit to build 2.275 million square feet of new academic space by 2035. The university has proposed adding 3,150 units or beds; the new county study considers two alternatives that would require a total of 5,699 (in Housing Alternative A) or 4,425 (in Housing Alternative B) units or beds.

The district is taking issue with the county's conclusion that no mitigation related to schools is required. The letter asks the Planning Department to revise its report to "meaningfully" address the potential impacts, both direct and indirect, on the school district.

The district's draft letter asks the county to provide a greater level of detail on an "unspecified" amount of off-campus affordable housing Stanford has proposed to build within a half-mile of any major Bay Area transit stop, which the county acknowledges would "disproportionally" affect Palo Alto, Menlo Park and Mountain View.

The county made made "no effort to quantify the effect this planned housing" would have, Tiedemann wrote, leaving "readers to guess how much housing is actually proposed under the project, where such housing would be developed and what effect such housing would have."

The district is also asking the county to identify concrete, "enforceable" actions that could be taken to mitigate the potential impact of this off-campus housing. The letter characterizes the offered mitigation as "vague and indefinite" — so much so that it "amounts to ... an abdication of the responsibility to identify and incorporate feasible mitigation that would reduce a projects (sic) impacts in an EIR."

The letter also criticizes the county's examination of the two additional housing alternatives, which have not been proposed by Stanford.

The county "should be clearer about what development scenarios are feasible and acceptable to Stanford so that it is not necessary to review different sets of impacts, requiring different mitigation measures, for projects with vastly different approaches and development footprints that may never come to fruition," Tiedemann wrote.

The letter also asks the county to correct an outdated student generation rate used in the report, which understates future district enrollment and thus related mitigation, Tiedemann wrote. The county made its calculations based on a rate of 0.5 children per household, while the district believes a 0.98 rate is conservative but appropriate. (The original rate came from an enrollment forecast that has historically been unreliable in the district.)

The district hopes the county will revise the updated environmental report to address direct as well as "secondary" impacts on the district, such as potential traffic and safety concerns or the need for a new school to accommodate increased enrollment. Board members asked Tiedemann on Tuesday to make clear in the letter that the district places high value on providing its students access to their neighborhood schools.

Board member Todd Collins has expressed concerns publicly about the project's potential financial impact on the district. At a meeting on the recirculated draft environmental impact report last week, Collins noted that because Stanford's rental properties are tax-exempt, the school district doesn't receive any property-tax revenues from the university. Collins said that absorbing the estimated 275 new students who would move in under Stanford's permit plan would constitute an annual school-district expenditure of $5.3 million, without any revenues to offset the cost.

Collins said that with Housing Alternative A, which would bring 1,500 students to the school district, the district would see $27.8 million in annual unfunded costs.

On Tuesday, Jean McCown, Stanford's associate vice president of government and community relations, said that the university has its "own concerns" about the additional housing alternatives the county is studying. It's "confusing to the community to make a lot of assumptions about what may happen," McCown said, "and arrive at some very large numbers ... without acknowledging the fact that it's a totally undetermined question."

"It is not the application of Stanford at this point in time," she told the board.

She noted that Stanford's property-tax exempt status is not new and that there are non-exempt Stanford properties, such as on-campus faculty housing, that generate a significant amount of revenue for the school district.

The board agreed that Tiedemann should submit the letter, largely as written with the addition of the value of neighborhood schools, by the county's July 26 deadline.

The board unanimously authorized staff to spend up to $20,000 on legal services related to the development of its response letter.

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Comments

27 people like this
Posted by common sense
a resident of Midtown
on Jul 17, 2018 at 6:26 pm

Jean McCown states in another newspaper, that the Stanford pays property taxes from Stanford Shopping Center and Stanford Industrial park. She is incorrect. The companies that rent the buildings at those locations, as part of their rental agreement pay the property taxes.

It's amazing how short sighted Stanford is being; do they think that having overcrowded schools, or under funded schools or forcing their employees' kids to overflow to schools miles away is going to be a selling point to attracting the best in staff or post doc or PHd students?


25 people like this
Posted by Resident
a resident of Crescent Park
on Jul 17, 2018 at 7:20 pm

The idea that Stanford owning commercial property somehow covers the need to pay taxes on their rental property boggles the mind. Do other commercial landlords get a free pass on their residential taxes?

It's sad to see them so greedy and unwilling to do their share. I wonder if it is to avoid having to build any housing in the first place, which they clearly don't want to do.


7 people like this
Posted by Blor
a resident of Midtown
on Jul 18, 2018 at 8:01 am

"The letter also asks the county to correct an outdated student generation rate used in the report, which understates future district enrollment and thus related mitigation, Tiedemann wrote. The county made its calculations based on a rate of 0.5 children per household, while the district believes a 0.98 rate is conservative but appropriate. (The original rate came from an enrollment forecast that has historically been unreliable in the district.)"

Both of these numbers seem high with respect to Stanford housing. 2010 census shows 3,913 households, out of which 517 (13.2%) had children under the age of 18 living in them and 917 people (6.6%) under the age of 18.

Housing alternative A would bring 5,699 units or beds, and Collins says it "would bring 1,500 students to the school district, the district would see $27.8 million in annual unfunded costs." Again this seems to be a high estimation of the ratio of how many under 18s will actually be present in the new development.


5 people like this
Posted by Stanford University Employee
a resident of another community
on Jul 18, 2018 at 10:56 am

Let's also keep in mind that 2700 employees are moving to Redwood City in 2019 and incoming students are more prone to not use a car, so from a traffic/environmental perspective there should actually be a positive short term impact.

And as for taxation on Stanford property, the University was here long before the Palo Alto School District.


15 people like this
Posted by Green Gables
a resident of Duveneck/St. Francis
on Jul 18, 2018 at 11:05 am

The district itself was founded on March 20, 1893, with the first school opening in September of that year

Stanford University was founded in 1885 by Leland and Jane Stanford, dedicated to Leland Stanford Jr, their only child. The institution opened in 1891 on Stanford's previous Palo Alto farm.

Yes, Stanford opened 2 years before Pausd, Stanford University employee


20 people like this
Posted by City leadership?
a resident of Midtown
on Jul 18, 2018 at 11:08 am

City leadership? is a registered user.

Happy to see PAUSD trustees taking the potential impacts of Stanford's growth seriously. (Wish they'd been as forceful regarding the City's comp plan which forecasts 4,400 additional non-Stanford-related housing units)

For their part, the city council made general (and conflicting) comments on a rushed staff summary of impacts and delegated the city's formal comment letter entirely to staff, with no substantive direction, and no expectation of meaningful council review (let alone public review).

In contrast, when it came to the citizens' initiative to control office growth, City Council hired a consultant, appointed an ad hoc committee and called a special meeting during their summer recess to scrutinize the impacts of the initiative and strategize how to counter it.


7 people like this
Posted by Stanford...Not so smart.
a resident of Duveneck/St. Francis
on Jul 18, 2018 at 12:31 pm

Stanford...Not so smart. is a registered user.

A relative who works at University of Minnesota tells me they are poaching STEM post docs who cannot afford Bay Area housing costs from Stanford. Let's work together to find solutions that work for our shared community.

How about 2.3 million square feet including adequate housing and mitigation for all of the 2.3 mill sf?


6 people like this
Posted by Not a good idea
a resident of Barron Park
on Jul 18, 2018 at 1:14 pm

Seriously “Stanford University employee?” Your argument is the university was there first. That is really a lame response. Stanford wants to add housing. The kids have to go to school. Why should the residents of Palo Alto have to subsidize them? Because the university was there first? Can PAUSD turn the kids down unless Stanford pays. I hope the legal fees are going to figure that out.

I pay a lot of property tax.


10 people like this
Posted by Annette
a resident of College Terrace
on Jul 18, 2018 at 2:35 pm

Annette is a registered user.

Dickens had the Artful Dodger and Stanford has an Artful Hairsplitter. Even if tax payments are paid by Stanford, leases usually provide for such expenses to be passed through to the tenant.

The truly alarming thing about this discussion is that at the end of the day it means that Stanford is willing to deliberately short-change childhood education in order to pursue the GUP it wants. That stinks. Good for PAUSD for pushing back.


11 people like this
Posted by Concerned Community Resident
a resident of Another Palo Alto neighborhood
on Jul 18, 2018 at 2:54 pm

OK, let's do the math.

A Stanford financial overview is available at:
Web Link
Take a look.

Stanford's endowment as of Aug 31, 2017 was $24.8 Billion.

Approximately 75% of the endowment is earmarked by donors for specific purposes, reducing the discretionary endowment funds to $6.2 B.

Stanford's operating expenses for 2017-2018 were $6.3 B, of which $1.260 B are paid from the endowment, thus reducing discretionary endowment funds to $4.94 B. This is the amount that Stanford apparently re-invests.

The highest estimated dollar amount of Stanford's underfunding of Palo Alto schools seems to be $27.8 M. Subtracting that from the $4.94 B leaves $4.912 B, or 99.4% of the endowment funds as discretionary/available for reinvestment.

Stanford fundraising reports #1.13 B in philanthropic gifts last year. If 75%, or $847.5 M is earmarked by donors, $282.5 M is discretionary or for reinvestment. Designating $27.8 M to fund Stanford school children in Palo Alto schools leaves $254.7 M, or 90% of the discretionary/available philanthropic gifts to be reinvested.

Stanford currently underfunds campus children in Palo Alto schools. The amount the PA school district is facing in both current and future unfunded costs, compared to the astronomical size of Stanford's finances, is clearly an amount that Stanford can afford to pay. Since 75% of the Stanford endowment is earmarked by donors, there is no reason that Stanford couldn't work with donors, at least some of whom also have or had children in Palo Alto schools, to earmark funds to support Stanford employee children going to Palo Alto Schools.

Finally, the way Stanford is counting new/additional workers, whether faculty or support staff (seriously, beds as criterion?) obfuscates the situation. What we need to know is:

Today:
How many people work at Stanford today.
How many live inside the Stanford campus borders today.
How many of those workers have children in Palo Alto schools.
How many live in Palo Alto today.
How many live outside Palo Alto and how far outside today (near and far commuters).
Future:
How many people Stanford is planning to add in the first expansion.
Undergraduates (without families)
Graduates (with or without families)
Faculty (with or without families)
Staff (with or without families)

For how many additional workers (with or without families) Stanford proposes to provide on-campus housing.
A reasonable way to estimate how many of the children of the above families will go to Palo Alto schools.

Where does Stanford expect the un-housed workers will live?

And this is just the first round of expansion/growth. I shudder to think what the future will bring.





8 people like this
Posted by jane J
a resident of Evergreen Park
on Jul 18, 2018 at 2:57 pm

jane J is a registered user.

@ Blor
"Again this seems to be a high estimation of the ratio of how many under 18s will actually be present in the new development."

Underestimating the numbers can lead to a potentially disastrous impact on the school district, so best to err on the side of caution and worst case scenario. Not to plan is to plan for failure. If Stanford contributes the true cost per head for each additional PAUSD child that the increased housing generates, that would be a fair mitigation.


18 people like this
Posted by jane J
a resident of Evergreen Park
on Jul 18, 2018 at 3:00 pm

jane J is a registered user.

If Stanford simply agreed to pay the school district the true cost per head for each additional child enrolled in the PAUSD, there would be no need to fight about how many or how few children there will be.


6 people like this
Posted by Common sense
a resident of Adobe-Meadow
on Jul 19, 2018 at 7:16 am

When tech companies moved to shared work spaces and crammed more people in, did anyone go after them? Stanford is being singled out and mistreated. If you want fairness, develop a work density limit and police it for ALL businesses. Far too many tech workers, moreso than Stanford students, are being crammed into illegitimate work spaces in Palo Alto.

I suspect Stanford students and faculty child rates are we'll, well, below average. Lots,of research on family patterns of this privileged class. Plus they have the funds to use private schools as alternatives. The efforts of many herein are misguided. Enrollment is not impacted by Stanford anymoreso than the local Gardeners.


Like this comment
Posted by Common sense
a resident of Adobe-Meadow
on Jul 19, 2018 at 7:31 am

Which I add - the Gardeners that flock to this area to service your multimillion dollar home (thank you Stanford) that is built on a quarter acre, which in other developed countries would have fit three to four families.

It's a complex problem and blaming Stanford or seeing it as a cash cow is short sighted. Growth is good, higher density is the future - embrace it. Moveon.org


12 people like this
Posted by Annette
a resident of College Terrace
on Jul 19, 2018 at 10:11 am

Annette is a registered user.

Generally speaking, I prefer to embrace only good things.

The schools issue that is associated with Stanford’s GUP application is a good “test kitchen” for evaluating whether the planned growth is in fact good. And sustainable. As a society, we like to make things better for our children. Yet here we are, looking at a situation in which the very demographic that should never “pay” for the impact of growth on schools will be asked to do just that either by being stuffed in over-crowded classrooms or bused to schools across town b/c the nearby school is full. Never mind for now the increased car trips and where-do-the-teachers live question associated with the issue.

Fortunately, this matter is in front of us BEFORE we proceed with a decision that has irreversible impact and we find ourselves backed into a “find a way to make it work” corner.

I bristle when I hear people say that density is the future b/c I am far from convinced that our decision makers have a plan for all the necessary pieces of that growth. Or a plan for funding all that will be needed. We’ve been on notice for years about the area’s transportation needs and haven’t even made enough progress on that front to adequately support our current level of densification let alone a greater one. A few days ago there was an article about double-digit openings in the PAPD. The City is struggling to fill the positions, despite the promise of a signing bonus and pay increases. A larger population in a more densely built environment does not solve that problem; it creates even more need.

It is often said that history is the best predictor of the future. Accepting that, what makes us think we can meet all the demands attached to densification and growth when we are already behind in so many ways?

If Stanford grows the percentage called for in the GUP and Palo Alto’s population grows the 15 – 30% that Council members Fine and Wolbach are proposing with their goal of building thousands more housing units here, we are going to come to a screeching, ugly halt unless all the systems that support that high level of growth are proportionately improved. If the schools issue isn’t the one that raises a red flag for you, maybe one of these will: traffic, roads, circulation, congestion, air quality, water, sewage, water treatment, hospitals, public safety, parking, housing.

I think we are well and truly stuck and that decisions made now will determine if we get more stuck or prove ourselves smarter than that and “give birth” only to that which we can support.


8 people like this
Posted by Me 2
a resident of Old Palo Alto
on Jul 19, 2018 at 12:06 pm

"When tech companies moved to shared work spaces and crammed more people in, did anyone go after them?"

You new here? Where have you been when all that Palantir complaining has been going on?

"Stanford is being singled out and mistreated."

Simple. Will Stanford housing pay property tax, which funds our schools or not?


Like this comment
Posted by Correct Information
a resident of Crescent Park
on Jul 25, 2018 at 10:54 am

Let's look at the numbers and see who's paying what. Since the 2016 election I have become determined to make sure correct and complete information is being presented to voters so I spent time on this. First question: How much revenue property taxes needs to be collected if 45% of one's property tax goes to PAUSD? If the cost per child per year is $19,200, then PAUSD needs to collect $45,666. Few households pay more than $45K per year in property taxes in Palo Alto. So it takes several households to pay to educate one child per year. Second, over 930 homeowners on Stanford Campus (single family homes, Peter Coutts, Ryan Court, Olmsted, etc.) pay property taxes the exact same as we do here in Palo Alto. They are all in PAUSD and 45% of their property taxes (just like ours) goes to the School District. I discussed this with Todd Collins and he agreed those households ARE doing their "fair share" and did not mean to imply they were not. These homes are predominantly owned by the faculty at Stanford. Mr. Collins concerns are about Stanford properties that rent to grad students, medical residents and some faculty. These fall into predominantly two complexes: Stanford West and Escondido. You can look up Stanford West property taxes online. They are up to date and Stanford paid over $1.1M in property taxes - excluding special assessments. 45% of that goes to the School District. Mr. Collins used an estimate to get the $450K that he's been stating as Stanford's contribution to PAUSD. The second property that generates students is Escondido which Stanford does not pay property taxes on. Stanford's response has been, hold on, our tax contribution to PAUSD is more than $450K, our commercial properties also contribute. $450K is not our only contribution (they don't mention homeowners on Stanford and neither does Mr. Collins, but someone should. I've met people who think they don't pay property taxes!) I believe the amount is between $23M-$25M total. So that's more than $10M to the schools. The idea that because the money comes from the business leasing the building and therefore doesn't count as coming from Stanford doesn't make sense. Of course the money comes from the entity renting the space! That's how all commercial buildings operate! It may not come directly from the tenant, but it ultimately comes out of what is paid by the tenant to the owner.


5 people like this
Posted by Marie
a resident of Midtown
on Jul 25, 2018 at 2:07 pm

Marie is a registered user.

Existing funding supports existing students. New students require new funding. If Stanford builds rental housing, they are exempt from property tax. Where will the money come from to educate the students from that housing? It should come from Stanford, one way or another.

Also, no, Stanford residents do not pay their fair share. My understanding is that they lease the land from Stanford, paying only for the structure, reducing the value on which the property is taxed. For my property, over 1/2 of the estimated value is the land. If land is not included, Stanford properties sell for far less and therefore do not pay as much tax as equivalent homes in Palo Alto.

If Stanford wants to expand, they should pay for the local infrastructure to accommodate that expansion as they did years ago, when they provided land for schools. When they leased or sold land to Palo Alto, it was in exchange for being allowed to develop housing. They received benefits for it. Unless Stanford provides land for a school near all the new housing, on the west campus, all those children (estimated to be enough to fill an elementary school) will not be able to walk to school and will add additional car trips. Stanford needs to take responsibility for its impact on PAUSD.


1 person likes this
Posted by Correct Information
a resident of Crescent Park
on Jul 25, 2018 at 4:59 pm

@ Marie. I have no vested interest in this issue. My husband and I don't have children (though we support every school bond and initiative because we value education); we own our home in downtown Palo Alto; and neither of us went to school at Stanford or even follow their sports teams. For the next election, I'm not going to even debate the issues, I'm just going to make sure the people I'm talking to are looking at the same information. I just looked up the taxes for someone I know who bought at Stanford 6-8 years ago. Their land is valued at $1.67M while their house is valued at $505K, so I don't know about saying that their land is valued less. We get into Prop 13 issues when we start to look at specific properties and talking about "fair share" since property values escalated after 1995. I do know that Palo Alto has a very limited supply of housing on the market because people would rather hang onto the property, rent it out and pass it through their estate to avoid capital gains. BTW: I learned that Stanford voluntarily pays the property taxes on Stanford West in the interest of being a "good neighbor." They could choose to file for a tax exemption and would get it if they wanted - like how people over 65 can choose not to pay school bonds. Are their property tax contributions enough? That's for each person to decide. If someone finds out about additional property taxes paid by Stanford other than what I've listed, please post.


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

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