Tempers flare as Stanford’s growth plan hits critical phase

With Stanford University’s bid to dramatically expand its campus entering a critical phase, the university doubled down Tuesday on its demand for a development agreement with Santa Clara County and suggested that it would not accept the county’s approval of its growth plan without such a deal.

Stanford made the bold announcement during Tuesday’s meeting of the Santa Clara County Board of Supervisors, which is scheduled to review Stanford’s proposed general use permit over a series of three hearings between October and early November. The Tuesday workshop on the permit gave the supervisors and the community a chance to gather some background information about Stanford’s growth proposal before the formal public hearing begins on Oct. 8.

If approved, the permit would allow Stanford to construct 2.25 million square feet of new academic development along with 2,600 student beds, 550 housing units for staff and faculty and 40,000 square feet for child care centers and transportation facilities aimed at cutting solo driving. In June, the Planning Commission recommended approving the growth plan but with one key and controversial provision: a requirement for Stanford to build at least 2,172 new housing units, which roughly quadruples the number the university outlined in its proposal.

One major sticking point between Stanford and the county was whether or not the two sides should move ahead with talks of a development agreement — a negotiated contract that would allow both sides to propose requirements and community benefits that go beyond the county’s regulatory requirements. The county agreed last year to authorize two of its supervisors — President Joe Simitian and Supervisor Cindy Chavez — to enter into negotiations with Stanford over such an agreement. The negotiations fell apart last April, however, when Stanford reached a separate agreement with the Palo Alto Unified School District on a package of benefits worth an estimated $138 million.

Stanford’s tentative deal with the school district hinged on the county’s approval of a broader development agreement with Stanford — a condition that Simitian and Chavez saw as Stanford’s attempt to get leverage over the county. Once news of the school deal broke, the two supervisors abruptly halted the negotiations over the development agreement. Since then, the county has continued to review Stanford’s application through its typical process, which involves certifying the Environmental Impact Report, imposing conditions of approval and going through public hearings in front of the Planning Commission and the Board of Supervisors.

But while the Board of Supervisors wasn’t planning to discuss the aborted negotiations over the development agreement Tuesday, the topic returned to the board with a vengeance when Supervisor Dave Cortese lambasted county staff for failing to negotiate with Stanford in good faith. After learning that the development-agreement negotiations were led by the ad hoc committee of Simitian and Chavez with little participation from county staff, Cortese accused County Executive Jeff Smith of “running a rogue operation.”

“That’s about as derelict as anything I’ve ever heard from anyone in government that I’ve ever been in a governance position to supervise … or keep on my payroll,” Cortese said.

Cortese said he was frustrated by the fact that the board hasn’t been updated about the negotiations with Stanford since it appointed the committee to negotiate with the university.

“I don’t like being in the position of being in the dark as to what’s going on,” Cortese said.

County staff, for its part, has consistently held the position that while it is authorized to negotiate a development agreement, it is not required to do so. Stanford’s prior general use permit, which the county approved in 2000, did not require a development agreement and neither has any other development that the county has ever reviewed.

The development agreement, which Stanford strongly hopes to achieve, would dramatically change the dynamic in the tense negotiations between the university and the county, shifting the county’s role from that of a regulator to that of a partner. County staff has been loath to make that shift, arguing that it would be important to first determine the requirements that Stanford would have to meet before deciding what other benefits and concessions the county should consider in a development agreement negotiation.

Smith said Tuesday that he believes development agreements are “only useful and good where it’s fairly clear exactly what other requests are being made outside the normal process going through planning.”

“In this situation, we have a complex and very complete planning document with lots of conditions of approval. It already went through the Planning Commission and is coming to the board for action. Trying to superimpose the development agreement on top of that is a formula for confusion and not a good approach, in my opinion,” Smith said.

After hearing Smith’s response, Cortese said he thinks it’s “absolutely absurd,” given the Board of Supervisors’ direction from a year ago, for staff not to take a more proactive approach on the development agreement and by not making a counterproposal to Stanford.

Stanford has also consistently pressed the county to negotiate an agreement, which university leaders argue is the best way to provide the community with “front-loaded benefits” and provide Stanford with long-term certainty that it will be able to grow. On Tuesday, Catherine Palter, Stanford’s associate vice president for land use and environmental planning, suggested that such an agreement would be a necessary component of whatever gets approved.

“Since many of these community benefits will need to be provided upfront, we have concluded that it will not be possible to accept a new general use permit without a corresponding development agreement,” Palter said. “Such an agreement will enable us to satisfy the county’s requests and provide the kinds of significant benefits our neighbors seek.

“In return, Stanford receives the predictability that a development agreement affords. We see a permit and the development agreement as a package.”

While some residents touted Stanford’s academic reputation and argued that the university shouldn’t be treated like other developers, Simitian pointed out that Stanford already gets special treatment. The general-use permit process — which effectively allows the university to build any project it wants within a 10- to 20-year period without first getting the county’s approval (provided the project is consistent with the permit) — is a tool that exists only for Stanford, he noted.

Stanford has always been able to get the approvals it’s been seeking from the board. The county, he said, has a “128-year history where every single application (from Stanford) has gotten a yes.”

“It seems to me there’s a pretty good track record and a case to be made for pretty responsive if not generous spirit by folks here at the county with respect to the mission of the organization and the development requests,” Simitian said, referring to Stanford.

The board’s discussion followed comments from a few dozen public officials and residents, most of whom urged the board to make sure Stanford’s expansion doesn’t aggravate the area’s already considerable housing and traffic problems.

East Palo Alto Vice Mayor Regina Wallace-Jones lauded Stanford as an educational institution but warned about the traffic and housing challenges her city is already experiencing. She said her city would like to see Stanford contribute $20 million for construction of affordable housing in her city and another $15.5 million to help fund necessary transportation projects.

“As we delved into the plan for housing, a lot of the workers, some of which are part-time, some of which are faculty, are not accounted for in the housing. And many of those housing units are sought in the city of East Palo Alto.”

Menlo Park City Councilwoman Betsy Nash said her city, like others, “struggles every day with two large and growing issues: One is inadequate housing availability and housing affordability and the other is traffic congestion that chokes our streets.

“Menlo Park residents, like others in Santa Clara and San Mateo counties, are fed up with the situation, and they elected us to do something about it,” Nash said.

Mountain View Mayor Lisa Matichak praised the proposal in her letter to the Board of Supervisors. Providing on-campus housing, she wrote, “would be a leading step by Stanford to help address our region’s housing crisis and reduce potential transportation impacts by allowing faculty, staff and students to walk or bike to work.

“If new housing is not constructed on campus, then there would be greater housing and transportation impacts to the city of Mountain View and other nearby cities,” Matichak’s letter states. “The city appreciates Stanford providing all of its housing on-campus to fully mitigate the significant residential impacts from its proposed academic facility expansion.”

Palo Alto Mayor Eric Filseth focused on the potential traffic problems resulting from Stanford’s expansion and suggested that the university be required to make significant contributions to big-ticket transportation projects.

“There is no dispute that the city of Palo Alto will be significantly burdened by the addition of nearly 3.5 million square feet of new development,” the letter signed by Filseth states. “Most acutely, the city will experience an increase in commuter congestion on its roadways and multi-modal networks that will extend travel times and exacerbate commuter frustrations.”

The letter argues that to fully mitigate its impacts, Stanford needs to provide “fair share” payments toward separating the Caltrain corridor from streets at intersections (the city estimates that Stanford’s share in the project should be $159 million), improving the downtown transit center ($99 million) and performing roadway maintenance on city streets that serve the campus ($1.2 million).

The impact of Stanford’s growth on schools is also an area of concern in Palo Alto. While Stanford has repeatedly assured the district that it will honor its commitment to provide $138 million in benefits to the district, a letter it sent on Sept. 23 appears to both reaffirm this commitment and make it conditional upon the county’s approval of a development agreement.

In the letter, Stanford Vice President Robert Reidy informed the district about Stanford’s decision to “only accept a general-use permit that has feasible conditions that Stanford can implement and that is accompanied by a development agreement.”

Such an agreement, he wrote, would guarantee that “the university can build its academic buildings under predictable land use rules and regulations.”

“I want to assure you that there will not be a future scenario where Stanford accepts a permit to build new campus housing without providing the committed benefits to Palo Alto Unified School District, which will be made possible by the package of a permit and a development agreement.”

Despite the letter’s multiple references to a development agreement, school board members at their meeting Tuesday evening interpreted Stanford’s letter as a commitment to deliver the benefits to the district regardless of what approval process is used. Superintendent Don Austin underscored Reidy’s statement that the university “remains unequivocally committed to the agreement we structured with the Palo Alto Unified School District earlier this year” as a clear indicator that Stanford would provide the benefits — notwithstanding the fact that the agreement earlier this year contained a provision that two county supervisors deemed unacceptable. Board member Ken Dauber said Stanford’s commitment is “as clear as can be,” while member Shounak Dharap went a step further and said the letter proves that Stanford’s commitment is “not conditional on a development agreement.”

At the Tuesday afternoon meeting of the Board of Supervisors, school board President Jennifer DiBrienza and Vice President Todd Collins both stressed the importance of having Stanford contribute to local education, given the number of new students — an estimated 1,500 — that the university’s expansion would bring to the district.

“We need to make sure the expansion of one great educational institution doesn’t drag down another,” Collins told the board. “Please, please insist on an agreement that protects Palo Alto schools.”

Simitian told the Weekly that even without a development agreement, the Board of Supervisors can require Stanford to contribute to school based on “findings” that the board has to make before it approves use permits. One such finding requires that the proposed use “not be detrimental to the public health, safety or general welfare.” If the university adds more than 1,000 students and doesn’t provide funding to the district to help pay for the extra cost of educating the students, supervisors would not be able to make this finding and would have to deny the permit, Simitian told the Weekly.

It’s hard to make an argument that adding that many students and reducing the district’s ability to fund students’ education does not constitute an impact detrimental to “public health, safety or general welfare,” both as the finding pertains to the students currently in the district and to the larger community, he said.

Simitian also suggested that asking Stanford to contribute to Palo Alto schools would be reasonable given the university’s exemption from property taxes. The Office of the County Counsel determined earlier this month that Stanford, were it not to have exercised its tax-exempt status during the 2018-19 fiscal year, would have paid $44.5 million to the Palo Alto Unified School District, and a total of $95.9 million to all local jurisdictions in the county, according to memos that Simitian provided to the Weekly.

The office also determined that the Stanford’s exemption leads to higher property-tax bills for households that the school district relies on to pay general obligation bonds. The exemption adds $118 for every $1 million of assessed value, according to county data.

The topic of schools is expected to take center stage at the Oct. 22 meeting of the Board of Supervisors, which will be held in Palo Alto. In preparation for that meeting, Simitian and Chavez issued a memo asking staff to determine the expected enrollment increase in the Palo Alto Unified School District associated with Stanford’s expansion, the impact of the expansion on per-pupil funding in the school district and other information, and the effect on school revenues of Stanford’s exemption from paying property taxes.