Palo Alto seeks tens of millions from Stanford expansion

City Council requests significant contributions for transportation, housing, planning efforts

With Santa Clara County and Stanford University now ramping up their negotiations over the university's ambitious growth plan, Palo Alto is asking the county to require Stanford to contribute significant funding for improvements to local rail crossings, bike paths, parks and planning efforts for the downtown area.

The laundry list of requests, which will be included in a letter to the county Board of Supervisors, includes a provision that Stanford pay the city affordable-housing fees based on its academic growth (in addition to the fees that the university already must pay to the county), that it help create a new pathway connecting Bol Park to Stanford Research Park and that it consider expanding its successful Marguerite shuttle system to serve a greater portion of the city.

The city is making its request at a pivotal time for Stanford's multiyear effort to secure the county's approval for a new General Use Permit (GUP). If approved, the GUP would empower Stanford to add about 2.275 million square feet of academic space, 3,150 new dwelling units or student beds and 40,000 square feet of child care and support facilities by 2035.

Santa Clara County had released in December its Final Environmental Impact Report for the growth proposal, which the county Board of Supervisors is scheduled to review this spring. Concurrently, a two-member subcommittee of the board is now negotiating with Stanford on a "development agreement," a contract that would give the county and Stanford more flexibility to negotiate. The city letter, which the council approved unanimously, aims to communicate to the county's negotiators, Supervisors Joe Simitian and Cindy Chavez, what the city would like to see in the new agreement.

The city is unlikely to see all — or even most — of its requests fulfilled. The housing fees alone could add up to $82.4 million, if Stanford grows to the level that the new GUP would allow, interim Planning Director Jonathan Lait told the council. And Stanford has fiercely resisted, through both lobbying and litigation, the county's recently passed ordinances to increase housing-impact fees for Stanford and to create a new requirement that Stanford designate 16 percent of its new units as affordable housing. In supporting the development-agreement process, Stanford is seeking to reach a deal that would nullify those ordinances.

With its vote, Palo Alto officials agreed Monday that they believe the city should also get some Stanford funding for housing. Councilwoman Liz Kniss, who as a former supervisor worked on Stanford's prior GUP (it was approved in 2000), called the housing contributions essential. She noted that Palo Alto's affordable-housing fund has been largely depleted, with the city recently committing $10 million toward a 59-unit below-market-rate project on El Camino Real, near Wilton Avenue (the city still has about $3 million remaining in the fund).

"We literally have almost nothing in affordable housing fund," Kniss said.

In making its request for housing assistance, the city is reasoning that about 19 percent of Stanford affiliates live in Palo Alto, according to the environmental analysis. The university's expansion will increase housing demand in a city where supply is severely constrained, according to a report from the Department of Planning and Community Environment.

The report acknowledges that Stanford will already pay housing fees to the county, but notes that this money "is controlled and distributed by the County and may or may not directly benefit Palo Alto."

In addition to the housing assistance, Palo Alto is asking the county to require Stanford to make significant contributions to transportation projects, large and small. This includes "fair-share" funding for redesigning the city's rail crossings (the share would be based on university-bound traffic), expanded shuttle service, the creation of a Bol Park path that would create a new connection between the university and Stanford Research Park and funding for other bike improvements in areas close to the university.

The city is also asking for a contribution of $1 million for design work on a new Downtown Coordinated Area Plan, an intense process that would consider grade separation alternatives for Palo Alto Avenue, the redesign of the downtown Transit Center and other potential changes to the downtown area. This effort is expected to cost about $2 million, Lait said.

In addition to requesting these contributions, the council is asking the county to require that Stanford commit to preserving the foothills from development. The 2000 GUP includes a provision that requires any proposal for development in the foothills to secure support from four of the five county supervisors. The city's letter will argue that this policy should be extended for several more decades, possibly until 2100.

The council also agreed to include in the letter a request that Stanford work with Palo Alto, East Palo Alto and Menlo Park to create upstream detention facilities that would improve flood protection around the San Francisquito Creek.

In addition, the council aligned itself with a request by the Palo Alto Unified School District that Stanford fully mitigate its impacts on the school district.

School board member Todd Collins, who attended the meeting, called Stanford's potential impact on the school system an "existential issue." The school board, he said, has already discussed at two closed sessions the prospect of filing a lawsuit challenging the Final Environmental Impact Report, which the county is set to certify in late spring. The board had also passed a resolution requesting that Stanford provide funding and possibly land for a new school to accommodate an expected influx of students as part of the GUP expansion.

The city and the school district deserve nothing less than "full mitigation" of Stanford's growth impacts, should the General Use Permit win approval, Collins argued.

"The community needs to mitigate the impact of 9,000 people coming to Stanford every day — in terms of housing, in terms of traffic, in terms of impact to schools," Collins said.

Mayor Eric Filseth concurred that Stanford should contribute to the school district. In addition to the comprehensive, wide-ranging letter that the council approved Monday, Filseth signed a separate letter signaling the council's solidarity with the school district.

"The City shares PAUSD's position that Stanford University mitigate any impacts that may occur as a result of an increase in student population, affect desired student/teacher ratios or otherwise diminish the quality of education provided to its students. The University and school district share a commitment to high quality education and both institutions benefit from mutual success," Filseth's letter states.

While the council has already made numerous requests for Stanford to mitigate the expected impacts of its growth, the letter that the council approved Monday is notable for its breadth and ambition. It included every request that city staff had suggested, as well as scores of others that staff had identified as "possible items for deliberations."

Several residents had submitted letters urging the council to be aggressive in requesting transportation mitigation from Stanford. Some focused on the grade separation project, the redesign of four rail crossings so that local roads would no longer intersect with the rail tracks.

David Shen, a resident of Old Palo Alto, was one of several to suggest that the city request that Stanford pay its "fair share" on all grade-separation projects as well as related projects such as the Downtown Coordinated Area Plan, which the council is looking to undertake in the coming months.

Stanford, Shen argued, should also "pay for all transportation projects across Palo Alto, including regular maintenance, new construction and personnel to support."

Southgate resident Rachel Croft had broader concerns about traffic conditions and called the city's response "lacking" when it comes to requesting transportation assistance.

"The traffic in Palo Alto is gridlock during commute times, and is already a or the major concern of Palo Alto residents," Croft wrote. "Addition of this academic space for workers and families will clearly bring more people into the area each day and cause more people to dwell in the area, which will impact ALL traffic throughout Palo Alto."


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25 people like this
Posted by Bonsense
a resident of Mayfield
on Feb 5, 2019 at 7:52 am

Why is Stanford continuing to expand in Palo Alto? Why not start another campus in a less crowded and more affordable area which would also help develop another region?

6 people like this
Posted by Resident
a resident of Crescent Park
on Feb 5, 2019 at 8:37 am

I don’t see how they could start another campus and maintain their curriculum. They have interdisciplinary studies. And I don’t think universities bring the growth and development to an area the way businesses do. Stanford’s been around for a very long time. This area boomed after google and Facebook and Palintir, etc. came along and brought both the jobs and the crazy high salaries with stock options. I’m surprised Stanford can recruit any talent anymore given the cost of living out here.

34 people like this
Posted by Big Picture
a resident of Another Palo Alto neighborhood
on Feb 5, 2019 at 9:20 am

If only Stanford would put some of its muscle towards protecting Palo Alto from being converted into a giant office park for companies that really should be moving elsewhere, they would face way less resistance to expanding.

The infrastructure is maxed out. This is a state prone to droughts. Many intersections already have grades D and F for traffic circulation because of all the day workers. Retail areas have been turned into stack and pack housing or day gyms for office workers, where once resident-serving retail (by code) existed. Quality of life in this area has dropped dramatically in the last ten years. Ordinary people's ability to conduct their business, entertainment, family life, around the Bay Area have been hugely curtailed and their productivity strained, all so that a few companies don't have to move when they are too big (but instead can violate code, take over city councils, and treat residents like crap/piggy banks).

If Stanford were to instead help residents protect Palo Alto from greedy, selfish companies, it would be possible for startups in this town again. It would be possible to expand without their own workers having the same impacts. Because Stanford owns all kinds of property, they don't have to care as much about the impacts of densification and how that raises the cost of land/housing and incentivizes the eviction of existing residents for bigger, newer high-cost developments such as was tried at Buena Vista and now being done at the President Hotel.

Densification will never catch up with demand because it satisfies and creates more demand.

The very presence of Stanford is one of the reasons our area is so under stress, but Stanford has been here for a long time. They should be trying to be a part of a solution. I don't think @Bonsense would be taken seriously, and I don't even personally think it's a bad thing for Stanford to expand, but the idea that they create a satellite campus somewhere, perhaps in concert with a few companies promising to move, and state dollars to support new civic amenities, could be a really good thing for creating another center of innovation where people want to move. The housing would be instantly affordable, and it would be possible to create a walkable, liveable place. They could do a search the way Amazon did to find communities that WANT the jobs, amenities, the renewal funds, and advantages a Stanford satellite campus could provide. (I would probably move there to retire...)

21 people like this
Posted by Big Picture
a resident of Another Palo Alto neighborhood
on Feb 5, 2019 at 9:32 am

Because all these companies basically want to take over Palo Alto in part to be near Stanford, the City should be thinking way more holistically and long term.

Stanford should be asked to create a fund that will allow Palo Alto to buy its retail areas and own them, similarly to the way Stanford does, or the way Palo Alto is able to offer things like schools and community centers in a high cost area because it owns the land.

If Palo Alto owned the retail areas, even just the land (not the buildings) the way Stanford handles its faculty housing, then the City could keep the rent really low and put higher wages for workers as a condition of the cheaper longterm contracts. This allows a diversity of resident-serving businesses to thrive because of stable costs, and allows the City to leverage higher wages for traditionally low-paid workers (who will then be able to afford, themselves, to live closer, meaning, the housing of workers can be handled in a smarter and more holistic way). Businesses will be more stable, be able to pay their workers better, residents will be able to be a town again, and the value of this to the City will only increase every year.

The City would not be able to have schools or community centers if it did not own the land. Stanford would not be able to attract faculty the way it does if it did not own the land. The retail areas of this town, and thus many functions of civic life and connectedness, area already suffering and are disappearing.

The City should not be taking scraps. This deal should create some value in perpetuity that offsets the development. Saving our retail areas should be one of them. The City should ask Stanford for a fund that will be dedicated to buying up all the retail areas, University, Cal Ave, Midtown, and and stretches of El Camino. (Some additional should be bought to offset the loss of retail and open space such as at Alma Plaza. Rooftop gardens my #@#$#$.)

7 people like this
Posted by Resident
a resident of Crescent Park
on Feb 5, 2019 at 9:57 am

@Big Picture. You want the City to own the retail corridor and then lease the land to stores??? A government owned city??? That’s a guaranteed way to make all sure all retailers leave the area.

16 people like this
Posted by Gimmee
a resident of Crescent Park
on Feb 5, 2019 at 10:46 am

Bonsense- only the hospital and shopping center are in palo alto. This expansion is on county land not palo alto. It is just greedy palo alto, the greedy council members and the greedy weekly acting as their propoganda tool are using this to try to extort money from Stanford. Wr all know how palo alto cannot manage their finances so they want Stanford to pay for everything. Gimmee, gimmee is their motto.

5 people like this
Posted by Chris
a resident of University South
on Feb 5, 2019 at 11:07 am


Do you even know that Stanfordnow has large medical and administrative complexes in Redwood City? It has medical offices in various parts of the Bay Area.

You can always count on a certain segment of Palo Alto residents to be Knee-jerk NO’s.

5 people like this
Posted by Robert
a resident of another community
on Feb 5, 2019 at 11:34 am

I'm surprised the council didn't ask for a pony! How. Absolutely. Absurd. Palo Alto should be ashamed for this kind of extortion - they're not asking Google, Facebook, or any other high-tech company for the same free dollars for their lack of fiscal planning. If I were Stanford, the first draft of my response letter would contain three words with the initials NFW.

14 people like this
Posted by Annette
a resident of College Terrace
on Feb 5, 2019 at 11:55 am

Annette is a registered user.

This could not be more important. Palo Alto struggles (mightily) to support its own growth. One need only attempt to cross town during ever-expanding commute hours to take measure of how we are doing on the traffic/circulation issue. Or count all the RVs along El Camino and elsewhere for a visual reminder of our self inflicted housing wound. Or read any paper any day for sorry stories about crime and homelessness and housing insecurity. And on and on.

Since we cannot support our own development-related choices it is ludicrous to think that we can ably support even a fraction of Stanford's 3.5 MILLION SF GROWTH PLAN. City Council must make demands of the University. As a community we must hope they submit a wish list of reasonable asks that can be validated. Why not aim for full mitigation?

What concerned me last night was the failed attempt to bring the letter back to CC for final review. Time is of the essence but last night we heard our new City Manager echo our former City Manager's frequent comment that Staff is busy. The inference is that Staff is too busy to handle all that is asked of them. That is exactly when final review is critical. Busy people are more prone to err or overlook. This letter needs to be right.

Said differently, we cannot afford another unfortunate typo. There's too much at stake. Given what the State wants to do to us (SB 50) and what we do to ourselves and what Stanford's expansion will do to us, this city and its closest neighbors will be stressed well beyond what they can support and manage. The problems and shortcomings of today will look like "the good old days". And we know better than to believe that.

I hope our City Manager writes the best, most compelling, most detailed letter he has ever written. And I sure as heck hope the letter is scrutinized by discerning eyes before it is sent. I think CC missed an opportunity last night when they didn't opt for that.

7 people like this
Posted by Em
a resident of Downtown North
on Feb 5, 2019 at 1:27 pm

Outrageous! What would Palo Alto do with the housing fees? I thought there was no place to build? I don’t think the city should get a penny from Stanford. And no fees from the county until the city changes the zoning and ups our density!

4 people like this
Posted by cmarg
a resident of Palo Alto High School
on Feb 5, 2019 at 2:27 pm

cmarg is a registered user.

I think one item that is not included is that the housing Stanford is proposing is non-taxed.

6 people like this
Posted by Resident
a resident of Community Center
on Feb 5, 2019 at 3:01 pm

Um, Palo Alto has changed its zoning for housing while reducing the amount of office that can be developed. The Stanford fees are for affordable housing in surrounding communities to address some of the impacts resulting from Stanford’s expansion. They are impact fees based on CEQA, not gifts to those cities who will accommodate that housing.
BTW, Palo Alto created an affordable housing overlay last year which allows for higher density affordable housing than other uses and provides other special allowances for those projects. Those changes helped the recently approved Wilton Ct 100% affordable project which was supported by the adjacent Ventura neighborhood.
The problem is that the project pretty much depleted the city’s affordable housing fund which helps such projects get built. In 2017 the pro development council majority voted against higher affordable housing impact fees on commercial development. Those fees would have also applied to Stanford development based on the 2000 GUP agreement so affordable housing was harmed two ways as a result of that miss guided decision.

4 people like this
Posted by Em
a resident of Downtown North
on Feb 5, 2019 at 4:03 pm

@resident. I’m well aware of the overlay that was created, but it hardly makes up for the rezonjng the city did in the early 80’s (I think it was then)when my neighborhood was zoned to get rid of duplexes, and cottages... developers continue to tear down mult-family dwellings and put up one house. The county imposedimpact fee was based on a housing nexus study. We need denser zoning.

9 people like this
Posted by Annette
a resident of College Terrace
on Feb 5, 2019 at 5:26 pm

Annette is a registered user.

First things first. We need affordable housing before anything else. And while we are adding that we should be working on improving those aspects of our infrastructure that impact traffic and circulation. Only after those improvements are in place can we start to add workforce housing. If critical infrastructure improvements aren't sequenced early, additional growth will bring this place to a screeching halt. And if that happens it won't really matter what side of the growth debate you are on now because one way or the other* we will all hurt from those growing pains.

*longer commute, difficulty recruiting, long delays doing the simplest things, stuck in your own driveway, parking struggles, inability to reliably get anywhere on time, inability to predict transit times, difficulty getting across town to your kid(s) in an emergency situation, unavailable public transportation, cost of housing, housing insecurity, loss of retail, need to drive to retail that has relocated to other cities, loss of services, etc. These things are all happening now. Planning to grow by 15% w/o addressing these issues is irresponsible. And arguably worse than not growing. Support only smart growth.

8 people like this
Posted by margaret heath
a resident of Evergreen Park
on Feb 5, 2019 at 6:47 pm

margaret heath is a registered user.

Our Interim Planning Director appears to rather regularly turn down requests from the Council and Planning Commission for more and/or better information, or as happened at council last night, a request for his Department’s timely action on a document. To bring back to the council the draft of the letter that Palo Alto will send to Santa Clara County Board of Supervisors detailing and requesting mitigations relating to Stanford’s massive expansion plans over the next fifteen years.

The Interim Planning Director stated there was not enough time left for Staff to both draft the letter and to bring it back to the council for their review and approval before the submission deadline. Even though Stanford’s expansion, and any mitigations Palo Alto requests, will have a profound and lasting impact on many aspects of Palo Alto’s future.

Why did the Interim Planning Director wait so long to bring this action item before the Council?

Could it be that during the last six months the interim Planning Director has redirected his department’s resources to prioritize spending countless staff hours preparing reports that contain recommendations for changes to the city’s zoning code? Only last week the Planning Commission was presented with yet another of these Staff Reports recommending changes that appear to have no immediate urgency, other than perhaps for the benefit of one commercial entity.

8 people like this
Posted by JR McDugan
a resident of Palo Verde
on Feb 5, 2019 at 7:37 pm

JR McDugan is a registered user.

Infrastructure is already maxed out. Developers got rich, residents got stuck with the problems. Enough is enough - ALL future development must pay for infrastructure to support it. Want to build a new apartment complex? Sure, just add a new lane on Alma. Build a new office building? Fine, pay for a new bike overpass at Meadow.

3 people like this
Posted by Big Picture
a resident of Another Palo Alto neighborhood
on Feb 5, 2019 at 9:57 pm


"That’s a guaranteed way to make all sure all retailers leave the area. "

Um, where have you been the last ten years, they already have.

Go drive around Stanford. They have big houses in neighborhoods that look more like the midwest, and their faculty can afford them. They buy the houses, but Stanford retains the land. This allows them to keep the neighborhoods relatively affordable.

It's the same for our schools and community centers, and other sites owned by the county.

This is the way so many ordinary people buy homes in Silicon Valley. Almost no one can afford the home they live in after living there ten minutes. You get into something really horrible, sacrifice everything for decades and keep moving up as the market allows. Or not. But at least it's better than renting, because at least costs relatively stabilize.

The City purchasing the retail areas, including the Fry's site, is the only way the City is going to remain a City with a reasonable quality of life. The Stanford expansion is a unique opportunity to make that happen. It also allows the City to get a more and more valuable (at no extra cost) way to leverage competitive wages for traditionally low-wage workers, a much more holistic way to provide housing and some economic mobility.

It will be the opposite problem, retailers will want to get longterm leases from the City, at lower-than-market-rate, and thus being able to pay their workers better wages will mean they have less turnover and can get better and more stable workers.

The greatest thing about such an arrangement is that it increases in value to the City over time and no additional cost. And it stabilizes our retail sector, which has been hit really, really hard along with quality of life and all areas of civic life by the overdevelopment and office overcrowding of the last ten years.

7 people like this
Posted by Menlo Resident
a resident of Menlo Park
on Feb 6, 2019 at 11:31 am

Stanford may not be "In Palo Alto" but what schools will the children of the families that occupy these new residents attend? Stanford does not have elementary and High Schools for these kids. The PA School district will foot the bill for them and would get zero dollars in property tax to help (Stanford is after all a "Non-profit").

Menlo Park, thanks to our last City Council, got screwed by Stanford. They are going to build a huge residential complex on El Camino and they will be using Menlo Park services like Police, Fire and of course the schools and paying nothing for them. The MP city council negotiated a paltry one time "donation" from Stanford that will not offset a years worth of the costs to support them. I don't understand how an organization that has untold Billions of dollars both in investments and in cash can be considered a Non-profit and be allowed to get away with what they do.

I guess if they want to be that bad neighbor then it is time to stand up to them and do what we can to stop that behavior.

8 people like this
Posted by Gimmee
a resident of Crescent Park
on Feb 6, 2019 at 11:45 am

Menlo resident- LOL. Stanford is the bad neighbor? How much land does attached lease to cities for nothing. What about the free to everyone shuttle system? How about the free to everyone dish area. The bad neighbors are greedy palo alto and Menlo park. Gimmee money they whine to Stanford. Gimmee. Gimmee. Why don't you try that same approach with big companies in the area that cause the same "problems" as Stanford. They will laugh in your face.

7 people like this
Posted by Corporate greed
a resident of Downtown North
on Feb 6, 2019 at 2:40 pm

Gimme is concerned that our super wealthy corporate neighbor, Stanford, will have to mitigate some of its mega expansion effects on us.
Stanford was once known for its academic excellence. But the money boys and girls have converted it into a corporate monster.

How many zeros in a Billion? Stanford endowment has 25 of them.

PS What shuttle? Their own?

4 people like this
Posted by Gimmee
a resident of Crescent Park
on Feb 6, 2019 at 3:56 pm

Corporate greed- Stanford still is known for its academic excellence. Stanford should mitigate some of the impacts, but really $82 million? Greedy palo alto cannot manage their own finances, so they want an $82 million dollar bailout from Stanford? Greedy palo alto should get their financial act together and come back with a reasonable request for mitigation, not a laundry list of everything under the sun that they want someone else to pay for. And an en DC I went is not meant to be wasted on a greedy neighbor that cannot even build a bike bridge over 191, despite Stanford giving then money for that.
And yes, the Marguerite shuttle that is free to everyone.

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

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