With the Santa Clara County Planning Commission just days away from making its recommendation on Stanford University's ambitious expansion proposal, the university offered the county a deal on Monday that would commit $4.7 billion toward housing, transportation projects and public schools.
In exchange, the county — which regulates the university's land use — would grant Stanford permission to build about 3.5 million square feet of new development by 2035 and back off from some of the new requirements that county planners had recently proposed to address problems that future growth would create. These requirements, which pertain to housing, traffic and open-space protections, are laid out in "conditions of approval" that the Planning Commission will consider approving on Thursday afternoon.
The proposal from Stanford is remarkable for both its sheer scale and for its unusual timing. On the one hand, Stanford is offering a package with an estimated $4.7 billion in benefits, including more than $3 billion for housing alone, according to the university's estimate. On the other hand, Stanford's offer comes just weeks after county leaders had indicated that they are not accepting offers at this time.
Furthermore, it conflicts with numerous requirements that county planners and consultants had proposed as part of the county's approval of Stanford's new "general use permit" (GUP).
The package that Stanford proposed on Monday includes $3.4 billion for housing, $1.1 billion for transportation improvements and $138 million for the Palo Alto Unified School District. On the housing side, Stanford would provide 2,600 student beds and 2,172 "workforce housing" units — although part of that 2,172 would consist of a credit for housing already under construction. The university is proposing that its Escondido Village housing development on campus and Middle Plaza project in Menlo Park would account for 865 units, leaving 1,307 units still to build. (According to Stanford, the Escondido and Middle Plaza housing total $1.26 billion of the $4.7 billion offer.)
The new workforce housing would include 575 affordable-housing units that Stanford would construct or fund in the first five-year phase of the campus expansion.
Of these 575 units, 400 would be built on campus. Another 87 would be funded through an immediate and one-time contribution of $27.6 million to Santa Clara County. The remaining 88 would be either subsidized through fees or provided on Stanford land (at least 47 of these would be in San Mateo County communities).
• See a table comparing Stanford's housing offer with the county's conditions of approval.
When it comes to addressing traffic problems, Stanford is proposing a contribution of $15 million to Palo Alto and $15 million to San Mateo County cities for bicycle, pedestrian and transit improvements. Stanford is also preparing to invest $1.1 billion in its own transportation system to maintain its "no net new commute trips" standard, which applies to peak commute hours.
In a news release accompanying the offer, Stanford called the proposal an "unprecedented" commitment to addressing the region's housing and transportation problems. Stanford President Marc Tessier-Lavigne said the offer "reflects our values as a residential university committed to sustainable development and service to the community."
It's doubtful that the county will receive the proposal with open arms. At the June 13 meeting of the county Planning Commission, Deputy County Executive Sylvia Gallegos re-emphasized that the county's negotiations with Stanford are "suspended at the moment."
"If and when the county re-enters negotiations, it will be done at a time that's most strategically advantageous to the county," Gallegos said at the meeting.
The Board of Supervisors, which will have the final say on Stanford's proposal, has shown no haste to negotiate with Stanford. Last year, the board authorized the use of a development agreement as a potential tool for approving the general use permit. But the county halted the process after a negotiation period expired in April, immediately after Stanford announced a side deal that it had made with the Palo Alto Unified School District. That agreement, which committed about $138 million of Stanford funds to the school district, was contingent on the county approving a development agreement — a condition that county leaders argued would give Stanford unfair leverage over the county.
Even after the county had suspended its negotiations, Stanford continued to lobby for the development agreement. In a letter to the county Monday, Stanford Vice President Robert Reidy asserted that through a negotiated document, Stanford "can provide greater community benefits than can be achieved through the county's standard land-use approval process."
"A development agreement is a contract that provides the community certainty as to significant benefits and the applicant certainty that it will be allowed to complete its long-term development under known regulations," Reidy wrote.
Pushing back against county requirements
Under Stanford's proposal, the county would rescind two housing ordinances that the board approved last fall pertaining to Stanford. One of them, which is now being challenged in court, requires the university to designate 16% of its new housing, as below-market rate. The other one requires Stanford to pay a "housing impact fee" of $68.50 for every square foot of new development.
The county would also grant Stanford permission to build 2.275 million square feet of new academic space, 40,000 square feet of child care facilities and transportation hubs and 2,600 student beds. And it would give Stanford more flexibility over how much of its new housing would be located on its campus as opposed to in surrounding communities.
Most critically, and perhaps controversially, it would require the county to significantly revise its proposed "conditions of approval," including ones calling for Stanford to build 2,172 units of workforce housing and ones that would revise how Stanford measures its traffic volumes.
While Stanford maintains that it is meeting the 2,172-unit requirement, it is relying partially on two housing developments that were proposed and approved before the current general use permit application: the Escondido Village development for graduate students and the 215-unit Middle Plaza development in Menlo Park. In a June 11 letter to the county, Stanford noted that the opening of Escondido Village next year will add 1,300 new apartments for graduate students, freeing up a similar amount of workforce housing in surrounding communities. (Stanford is recommending it get credit for 650 housing units for Escondido and 215 for Middle Plaza.)
The county, however, has rejected that argument. Both Gallegos and Geoff Bradley, a consultant who is managing the project for the county, argued earlier this month that Stanford is simply offering fewer units than the county is recommending in its conditions of approval.
"The Stanford proposal as currently envisioned is 40% less than the documented demand. We feel that's the bottom line comparison," Bradley told the commission on June 13.
In addition, Stanford is recommending it continue to abide by the current "no net new commute trips" requirement and that the county desist from adding new requirements, as proposed by planning staff. The county's proposed conditions of approval call for the additional monitoring of traffic during daily peak commute periods (longer than the current one hour during the morning and afternoon), reverse-commute trips and of average daily traffic.
In the latter two cases, Stanford would be constrained from developing if it exceeds the set thresholds (2% for reverse commutes and 3% for average vehicle trips) in consecutive years.
Stanford has pushed back against the new measurements, noting that it cannot simultaneously build workforce housing on campus and reduce the car trips associated with this housing. The university has instead offered to mitigate its transportation impacts by paying a "fair share" contribution toward various transportation projects in and around the campus.
(While not making it part of the $4.7 billion offer, Stanford has stated it would pay $1.275 million to compensate for reverse-commute traffic.)
Getting back to the negotiations table
With the new offer, Stanford is attempting jump-starting a process that has been frozen since April. Board of Supervisors President Joe Simitian and Supervisor Cindy Chavez, who were on the county's development agreement negotiations team, had met with Stanford officials in early May and told them that they would be willing to reopen talks if Stanford is willing to conduct the negotiations in public and if the university continued to guarantee to the Palo Alto school district the $138-million package of benefits, not contingent on the new development agreement.
In its Monday offer, Stanford retains its $138 million commitment to the Palo Alto Unified School District, which includes a contribution of $5,580 for each new pupil for 40 years, $15 million for a new "innovation space" and $500,000 for "safe routes to school" projects that encourage more bicycling and walking. However, Stanford's commitment remains contingent on the county's development agreement with the county. Because of that, it remains unacceptable, Simitian told the Weekly.
While Stanford characterized its proposal as a colossal package of benefits, Simitian dismissed it as a "Hail Mary" pass thrown by Stanford just days before the planning commission meeting. Many of Stanford's conditions, he said, are things the university had proposed in the past and that county staff had rejected. This includes having Stanford get credit for housing units at Escondido Village and retaining existing metrics for measuring traffic.
"This is about the university wanting to negotiate bilaterally, rather than being subject to the regulatory authority of the governing land use body," Simitian told the Weekly. "I understand why they want to do it, but it's not in the public interest."
He also rejected the notion that Stanford is negotiating in a transparent fashion. Simitian said he would support a process in which "we sit in a room and everyone is welcome." Instead, Stanford had basically presented a proposal as part of a 52-page letter that says nothing about open meetings in public settings.
Stanford, for its part, emphasized that the public will have plenty of opportunities to weigh in. Jean McCown, Stanford's associate vice president for government and community relations, told the Weekly: "The county has stated if there is a development agreement proposal ... they would want to bring it back to the Planning Commission first, and then eventually it would go into the Board of Supervisors. And, you know, nothing is final until it's all in public view.
"Hopefully, as we did with the school district, (there will be) a mutually supportive package that gets revealed to the public, and the public can react to that and comment on it before any decisions are made about it," she said.
McCown noted that with its Monday offer, the university is hoping to help answer the question: What is it that Stanford wants to do?
"This way there's not a lot of speculation. It's telling people what we want to do and what we'd like to have out of it, which is long-term certainty that our academic campus can be developed over time," McCown said. "We know from experience, with the Mayfield soccer fields and Stanford Hospital and Packard Children's Hospital being the two most recent examples, that you can really get things accomplished through a development agreement."
The Planning Commission, for its part, has shown some appetite for a development agreement. Despite Gallegos' assertions that the county is not pursuing such an agreement, several commissioners said they'd like to see the county proceed with a deal with Stanford.
Over time, all of us have stated we want to encourage a development agreement," Vice Chair Marc Rauser said. "It does provide some outside-the-box opportunities."
The commission will get its first chance to consider Stanford's offer Thursday and weigh it against the conditions recommended by planning staff and consultants. McCown said the university is hoping that some of the new conditions, including Stanford's commitment to build the housing in the early phase of the campus expansion, will cause county leaders to reconsider their plans.
"We're hoping that our commitment to actually developing and building and providing this housing early is a significant improvement over their (county staff's) conditions that would cause them to modify the conditions to be consistent with this," McCown told the Weekly.
The Planning Commission will hold its third meeting on the Stanford general use permit at 1:30 p.m. on Thursday, June 27, in the County Government Center, 70 W. Hedding St., San Jose. The commission has also scheduled a fourth meeting, if necessary, at 1:30 p.m. on July 1 in the same location.