County planners reject $4.7B Stanford offer | June 28, 2019 | Palo Alto Weekly | Palo Alto Online |

Palo Alto Weekly

News - June 28, 2019

County planners reject $4.7B Stanford offer

University continues to call for development agreement to govern future growth, but county supervisor says Stanford offer is 'not in the public interest'

by Gennady Sheyner

The tug-of-war between Stanford University and the County of Santa Clara over requirements that will be made of the university in exchange for permission to further develop its campus continued this week, with Stanford offering on Monday to commit $4.7 billion toward housing, transportation projects and public schools and the county's planning staff summarily rejecting the proposal.

Stanford's offer, which comes at a critical time in its bid for a new "general use permit" was immediately met with criticism from county Board of Supervisors President Joe Simitian, who was one of two supervisors authorized last fall to negotiate with the university. Simitian dismissed the proposal as a "Hail Mary" pass thrown by Stanford just days before the Thursday, June 27, meeting of the Planning Commission, which found itself weighing the recommendation of the county's planning staff against Stanford's new proposal.

At the meeting, county staff similarly pushed back against Stanford's offer, which the university claimed includes $3.4 billion for housing alone. County staff have vehemently rejected these numbers and argued that most of the "benefits" are in fact legally mandated mitigations or, in some cases, part of the proposed development itself.

Deputy County Executive Sylvia Gallegos pointed to the 2,600 student beds, which Stanford is including in its package of benefits and which comprises a $1.4 billion investment.

"Those aren't community benefits — that's the project application. It's what they're proposing to develop," Gallegos said.

The real value of Stanford's "community benefits" is $166 million, Gallegos said, which includes $138 million that Stanfod had previously offered to the Palo Alto Unified School District under a tentative deal that was never adopted.

Gallegos recommended that the commission reject Stanford's proposed "development agreement," which conflicts with numerous conditions of approval that county planners and consultants proposed in May as part of Stanford's new general use permit (GUP).

If approved by the Board of Supervisors, the permit will allow Stanford to build about 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 by 2035.

To win approval, the county is proposing that Stanford provide 2,600 student beds and 2,172 "workforce housing" units. The university, for its part, has requested that the county give it credit for 865 units for the Escondido Village housing development on campus and Middle Plaza project in Menlo Park, which would leave 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.)

Stanford also had offered to include 575 affordable-housing units of "workforce" housing, which the university 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).

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.

Yet the transportation proposal also met resistance from county staff. Rather than accept Stanford's offer, county planners reiterated their call for new and more stringent requirements for measuring traffic impacts, including consideration of reverse commutes and average daily traffic.

The county and Stanford are also at odds over a potential development agreement. 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.

At the commission's June 13 meeting, 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.

On Thursday, she similarly recommended that the Planning Commission reject Stanford's new offer.

Pushing back against county requirements

Along with its offer to invest billions of dollars, the university would also 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 would meet 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. Catherine Palter, Stanford's associate vice president, told the Planning Commission on Thursday that the Escondido Village development "will open up hundreds of rental units in the community for future workers."

"The current base of graduate students is occupying off-campus workforce housing units today, and 75% are living within six miles of campus," Palter said. "When they move onto campus in 2020, their vacated off-campus units will be available to serve future growth in the workforce population."

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.

"The Stanford proposal as currently envisioned is 40% less than the documented demand," Bradley told the Planning Commission on June 13.

County staff on Thursday reasserted their position that the Stanford offer falls far short of what's required to mitigate growth. In exchange for the purported benefits in Stanford's development proposal, the university is seeking a "loss of important community protections," Gallegos said.

Staff opposes the development-agreement proposal, she said, "because it asks us to pay a very significant price on behalf of the public."

In addition, Stanford is recommending that it continue to abide by the current method of monitoring campus traffic and that the county desist from adding new requirements. The county's proposed 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.

But Stanford staff have said the university 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.

After declining to re-open development agreement negotiations last month, county leaders stated that they would return to the table if the negotiations process were open to the public, a condition that Stanford is rejecting.

That's not to say that the public would not be part of the overall approval process, noted Jean McCown, Stanford's associate vice president for government and community relations.

"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.

But Simitian rejected the notion that Stanford is interested in negotiating in a transparent fashion.

"I understand why they want to do it (this way), but it's not in the public interest, "Simitian told the Weekly.

Dozens of speakers turned out Thursday to address the commission, with business leaders, union workers and various members of the Stanford community urging the commission to back Stanford's proposal and elected officials from neighboring communities voicing support for the county's conditions.

Palo Alto Councilman Tom DuBois pointed to a new analysis from Palo Alto's transportation consultants indicating that Stanford would need to provide about $260 million in "fair share" contributions for transportation, far more than Stanford has proposed.

The conditions of approval proposed by staff are "a critical baseline to which any further agreements should be based."

"It's important to establish that baseline," he said.

East Palo Alto Councilman Larry Moody similarly favored the county planners' position and suggested that Stanford should have done more to engage with his city, which already suffers from heavy traffic jams and which remains vulnerable to gentrification from the proposed influx of students and faculty.

Stanford's development "will significantly exacerbate the housing crisis associated with the traffic gridlock," Moody said.

"For them to believe they can move forward with the project without having consultation with East Palo Alto is something that they shouldn't be proud of," Moody said.

Staff Writer Gennady Sheyner can be emailed at gsheyner@paweekly.com.

Comments

18 people like this
Posted by Gunn neighbor
a resident of Barron Park
on Jun 24, 2019 at 7:43 pm

Hard to see why Simitian refuses to negotiate. He's going to have to eventually, and meanwhile Stanford looks reasonable and he looks obsessed with his negative view of them.


33 people like this
Posted by Oz
a resident of Community Center
on Jun 24, 2019 at 11:23 pm

Thanks to the Weekly for providing a first cut at actual analysis of Stanford’s proposal. Stanford’s press release and desired headline has already hit the major state and national media.
In reality, Stanford has repackaged and repurposed money that they spent previously for the new Escondido project and they appear to be claiming all of their existing ongoing transportation dollars as if they are new mitigation funds.
This is one of the most cynical efforts in memory to try to mislead what they hope is a gullible public and press, since they know that no serious policy maker will be fooled. It is strikingly similar to Google’s recent PR claim that they are going to spend $1B over a decade for housing when 3/4 of that ‘money’ is the value of the land they already own. At least it does not look like Stanford has tried to claim the land value that they are building on.
This kind of deception is beneath the dignity of a great intellectual institution and it is really disappointing that President Tessier Lavigne would stoop to signing on to it. As Ben Franklin said, it takes many good deeds to build a good reputation and only one bad one to lose it.


15 people like this
Posted by Peter Carpenter
a resident of Atherton
on Jun 25, 2019 at 6:44 am

Peter Carpenter is a registered user.

Look at the facts - this is a great offer by Stanford and much more than ANY other employer/developer in Santa Clara and San Mateo County has ever done!

Why doesn't Simitian like it - simply because he does not get credit for negotiating this since he walked away from the table.


15 people like this
Posted by Leonardo Leal
a resident of St. Claire Gardens
on Jun 25, 2019 at 7:14 am

Great news for Santa Clara county! We are blessed to have one of the most respectable institutions in the world a stone’s throw away. I sincerely hope that the local officials realize the privilege of having this offer, for Stanford was the nest and precursor of the success of the entire Silicon Valley.

As someone already mentioned, not even Google has been able to match the sheer size of this offer and I hope that the county realizes what the meaning of $4.7 Billion reflects. With the lack of development in the Bay Area, this move would put us closer to the future and aid in our comprehensive economic and academic development as a region in the world.

We simply need to move away from small town ideologies and embrace the potential benefits this growth will have for all of us. Considering the treatment other Universities have had in California’s city development (USC), this offer is already extremely generous and reasonable. Now, it is up to the county to demand the remaining housing impact from the companies around the area and focus how it can sustainably allow for future development. The amount of red tape to even expand a girls’ school ( Castilleja ) is discouraging, Trust me, growing up in Mexico we rarely heard of a university offering this type of support. What a dream.

Please realize your privilege and allow the expansion of education in this area. I would prefer 1000x times to see expanded educational opportunities rather than pure commercial development.

LDL


10 people like this
Posted by Watcher
a resident of Green Acres
on Jun 25, 2019 at 9:18 am

It will be interesting to see where this ends. For Simitian, it is obviously about "getting the credit" for whatever comes, especially for housing. He's running for Congress, and desperately needs those labor votes and dollars (Chavez also a big labor person of course). Everything else is rounding error to them.

On the other hand, it feels like the County is likely to wind up at the wrong end of a law suit - even the Planning Commission can't figure out why they are doing this charade of a process, when the county should just be negotiating like it said it would. That a county official would publicly say, "we'll negotiate when it's to our advantage" seems particularly awkward - seems like she'll have to explain that one in depositions and on the stand.

Of course, by the time the court case settles, Simitian's 2020 election date will be passed, so who cares!


12 people like this
Posted by Anon
a resident of Another Palo Alto neighborhood
on Jun 25, 2019 at 9:43 am

This part still irks me.

>> 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,

Not nearly enough to cover the marginal cost of educating a new pupil

>> $15 million for a new "innovation space"

Don't want it, don't need it, don't want to pay for maintenance down the road. Take the $15M and put it towards the cost of educating new pupils.


4 people like this
Posted by Authority or precedent?
a resident of Crescent Park
on Jun 25, 2019 at 10:28 am

Authority or precedent? is a registered user.

@Peter Carpenter. You seem quite knowledgeable perhaps you know the answer to this question. Where does the County get the authority to make building four times the requested housing a condition of approval of the permit? Where is the legal precedent for this? I know that one can be required to pay housing impact fees OR provide housing, but to insist that Stanford build the housing seems like an over reach? Similarly,I have the same concern for the County's requirement that 70% of that housing needs to be on the campus core. It really seems that the County is hoping to get sued on this issue with the goal of creating a new precedent. Anyone else who can cite for me a case or statute, please chime in. I already know about the whole balance of public and private interests, but these two demands seem really over the top. Thank you.


12 people like this
Posted by 94025
a resident of Menlo Park
on Jun 25, 2019 at 11:08 am

94025 is a registered user.

What about the Menlo Park City School District? And Redwood City? Let's not forget all the other nearby communities whose schools will have increases.


2 people like this
Posted by Resident 1-Adobe Meadows
a resident of Adobe-Meadow
on Jun 25, 2019 at 11:50 am

Resident 1-Adobe Meadows is a registered user.

I am happy to see the commitment to the PAUSD. That alleviates some concerns on funding for the upgrade of CUB. Under the initial attempts the city would have to request a bond issue. This now eliminates the need for a bond issue. If there is a bond issue it would be carried by SU - but doubt there is any requirement for that.
One of the initial problems with the PACC CUB effort was lack of disclosure on how the activity funded. There was only one choice there.
Always - follow the money.

PAUSD = here is your opportunity to put a third high school in place - as well as the Greendell school. Don't blow it by adding housing. Housing will take care of itself because there are now a lot of forces at work on housing that are outside of the PAUSD umbrella. The PAUSD umbrella needs to retain it's specified purpose for legal and tax reasons. That is our taxes - the property owners - we support the school system through our property taxes. We all are not supporting housing on our property taxes. Any housing needs to be a commercial venture which is outside of the PAUSD umbrella.


12 people like this
Posted by Elizabeth
a resident of South of Midtown
on Jun 25, 2019 at 11:53 am

As always, buy the quality of life of the population by enticing the powers that be.

The building going on, on campus is already obscene. Big city life is taking over The Farm.

Just as the roads are becoming roadblocks that are painful to traverse for those who have to on a daily basis, the decision makers won't be the ones that suffer.

More students, mean a growing population for Palo Alto whether it can manage it or not as a large number of graduates choose Palo Alto as their home.


4 people like this
Posted by Chris
a resident of University South
on Jun 25, 2019 at 1:13 pm

Stanford has said what it wants. The county has made some unreasonable requests, Simitian doesn't seem to know what he wants. He should correct the obvious flaw in the county plan and then get public input on the 2 plans while avoiding having Stanford sue the county.


31 people like this
Posted by Film Flam Housing
a resident of Another Palo Alto neighborhood
on Jun 25, 2019 at 1:54 pm

This offer is mostly recycled housing already approved as part of other projects. Stanford is trying to fool us by double dipping!

215 units of this housing is from the Menlo Park project already started on ECR.
865 units it claims will be freed up in the community when Stanford people will move on campus is a baseless claim - many will be occupied by more Stanford people. And how many will move in the first?
That’s a total of 1080 film flam units - for shame Stanford.

Don’t be fooled! It’s Supe. Simitian who is cutting through this BS and working for us, the people who live in the towns impacted most by Stanford’s desired development.

Sure Stanford does good things but that’s not the point here. The point is land use, planning and mitigation of its impacts. If Stanford doesn’t want the burden of fully mitigating its impacts, it can choose to cut back on its desires. It can develop less.


12 people like this
Posted by PA Resident
a resident of Downtown North
on Jun 25, 2019 at 2:19 pm

There are a lot of numbers thrown around in this article, but the total of new personnel - students, faculty, staff - from both the present expansion in progress and the future expansion (the subject of the GUP negotiation) is not indicated. I don't know what the number of increased personnel will be from the present expansion, but the next wave of growth will be 9000 people.

Stanford plans to house the students and a small number of faculty in the next expansion but not the rest of the faculty and the staff. Which means that possibly upwards of 7500 more people (roughly 12% of Palo Alto's current population) will be commuting into the campus every day. If you have ever tried to drive on Oregon, Middlefield, Embarcadero or University Ave at commute time, imagine what it will be like with several thousand more cars added to those streets.

In addition . . . Stanford has land on campus that is currently zoned for housing. They want to change that zoning to other things, and not build housing for the new people. That should not be allowed to happen. Stanford is not just a university . . . it is a small city. And as such, it should be subject to the Bay Area wide requirement for cities to provide housing for the jobs they add.


13 people like this
Posted by Anon
a resident of Another Palo Alto neighborhood
on Jun 25, 2019 at 2:35 pm

Posted by Chris, a resident of University South

>> Stanford has said what it wants. The county has made some unreasonable requests, Simitian doesn't seem to know what he wants.

Every time I see the ad hominem argument against Simitian, I don't bother to read the rest. Anyone with a serious argument will be able to articulate the logic without attacking Simitian. Like him or not, this is not about Simitian.

It is about Stanford's land use, Stanford's traffic, Stanford's impact on surrounding school districts, etc. Make your argument regarding the project's impacts and benefits.


4 people like this
Posted by Mary O
a resident of Crescent Park
on Jun 25, 2019 at 3:34 pm

Mary O is a registered user.

@PA Resident. Where do you get your numbers from? This proposal fulfills the County's request. And, I have serious concerns that the County is over reaching its authority by making all this additional housing a condition of approval of the GUP. But, ignoring the legal issues, the proposal itself deserves some thoughtful consideration and discussion. That's what our elected officials are supposed to do! We just have the "highlights" here. It's 52 pages long according to the article. One statement in the article jumped out at me, " developing and building and providing this housing early is a significant improvement." We need the housing NOW. Look how long Maybell took? Sixty affordable housing units for seniors plus twelve homes were approved by the City Council in 2013. Citizens banned together and stopped it via a ballot measure in 2014 (our mayor was part of that effort). A new project for sixteen homes was approved just recently. From 72 units to 16 and it took six years just to get approval to move forward. We don't have that time. Let's at least read the proposal and discuss it.


2 people like this
Posted by common sense
a resident of Midtown
on Jun 25, 2019 at 6:09 pm

If Stanford were to play the long game, they would make moves to incorporate as a city and remove themselves from the clutches of the county. It would take years, but the negotiations with the county will be taking years.


5 people like this
Posted by Peter Carpenter
a resident of Atherton
on Jun 25, 2019 at 6:28 pm

Peter Carpenter is a registered user.

"@Peter Carpenter. You seem quite knowledgeable perhaps you know the answer to this question. Where does the County get the authority to make building four times the requested housing a condition of approval of the permit? "

Because the County will have to approve each building permit as it is submitted the County can exert pressure on any applicant to make some concessions. If that pressure exceeds the bounds of fairness and becomes extortion then the Stanford lawyers will both win the day and also claim both costs and damages from the County.


9 people like this
Posted by Collaborative Resident
a resident of Midtown
on Jun 25, 2019 at 9:21 pm

Stanford has offered the basis of a solution for mitigating its impact on the local communities. It may not be perfect and whether its true value is $4.7M or $3.7M or $2.7M of incremental money that is completely irrelevant. What is relevant is that it is an offer to try to restart negotiations and it is at least $1.7M more than other other major employer in the region has offered. Stanford is not the only entity contributing to traffic issues in Palo Alto. Drive toward downtown PA on any given day and take the University Avenue exit. The flow of traffic turning left towards campus, the hospital, and the Stanford Mall is pretty smooth. The traffic turning right encounters long lines and waits. Perhaps it is the the downtown employers who are also contributing to the problem!

BOTTOM LINE: Stanford cannot be expected to solve these problems alone. If SImitian wants to be the hero here I would strongly advise him to convene a joint meeting of all the large employers in the region with a large land footprint (Stanford, Google, Palantir, Facebook, VMWare, Lockheed etc etc etc) and have them work together to come up with the $$ and ideas needed to solve these challenges.


5 people like this
Posted by Mary O
a resident of Crescent Park
on Jun 25, 2019 at 9:51 pm

Mary O is a registered user.

@Collaborative Resident. You're off by a factor of 1000. It's $4.7 billion, not million, that Stanford is proposing to fund. And, unlike Google's proposal, they do not assign any value to the land used to build the new homes - they list only construction costs. Google has offered $250 million in funding to go towards construction ($750 million of that $1 billion is the value of the land they will repurpose). It's worthwhile for people to actually click on the link to the proposal and see and understand how the numbers break down. I would very much like to see the Planning Commission and the Board of Supervisors to give it some serious and thoughtful consideration. We all should.


4 people like this
Posted by Collaborative Resident
a resident of Midtown
on Jun 25, 2019 at 10:25 pm

@Mary O. You are absolutely correct. Major typo on my part! Should read..."It may not be perfect and whether its true value is $4.7B or $3.7B or $2.7B of incremental money that is completely irrelevant. What is relevant is that it is an offer to try to restart negotiations and it is at least $1.7B more..."

My bottom line remains the same: pull all the major stakeholders together and get them to collaborate on finding solutions and resources! Instead of playing silly rules games and refusing to sit down and negotiate the county planners should focus on finding solutions


10 people like this
Posted by FunnyMoney
a resident of Crescent Park
on Jun 26, 2019 at 12:25 pm

Two points: 1)This is funny money, and less than is likely to fully mitigate under the law. 2) The County Supervisors are correct to require completion of the EIR and Conditions of Approval BEFORE negotiating.

Just like Google's $1B offer of funney money ($750M for its own employee housing and $250M in market rate loans where it earns interest), Stanford's numbers aren't real, counting things already approved as part of the next GUP, funding programs they've already agreed to fund - just take the School district numbers - most of it is based on enrollment numbers which the district forecasts as no growth. The GUP is 20 years long and the PAUSD will get rengeotiated in 20 years, so at most its half of the stated number. It is zero dollars guaranteed funding as currently written. And $15M for Palo Alto's traffic when they know they need to spend $1B for their on campus transportation - it doesn't cover the impacts of their development.

Stanford has opted to not be part of Palo Alto. As such, the county government process with conditions of approval to mitigate impacts is the BASELINE. This process needs to be completed first. Then once everyone can see what Stanford is legally obligated to do, negotiated agreements could be put in place for any remaining pieces. But a negotiation should only occur once the County Supervisors get the conditions of approval in place. Stanford is desparate to go behind closed doors and try to neogiate every last piece of the deal, whether it's legally required or not. The arrogance and tone deafness is astounding.

There is no way Stanford is offering MORE than they expect to pay under the County review process. They continue to try to split local cities and school districts in order to pay less than what is required to mitigate this largest county development project EVER.

They've ramped up their PR machine to full throttle. Hopefully the county supervisors, count planning commissioners and general public are smart enough to see through these desparation tactices.


4 people like this
Posted by Resident
a resident of Crescent Park
on Jun 26, 2019 at 12:41 pm

@Funny Money, I haven't analyzed the full Stanford proposal, but I don't understand your points. The school mitigation is based on the number of students Stanford actually produces from the new GUP. They made an assumption (500 students?) for the purposes of coming up with a number, but the amount will change based on actual enrollment - it isn't based on any enrollment forecast. And yes, it will likely get re-negotiated in 20 years, but since the District insisted on a 40 year deal, it makes sense to count it. Plus $16.5M is up front and not contingent on enrollment.

Yes, they are trying to pay less, in exchange for paying sooner and in more direct and helpful ways. No one is forcing the county to take it - but it is weird that they won't even negotiated There's also the issue of whether what the County proposes is legal - forcing an employer to supply workforce housing on its own land as mitigation has never been done, as far as I can tell. The conditions of approval will have to stand up in court - we'll see if they do.


1 person likes this
Posted by george drysdale
a resident of Professorville
on Jun 27, 2019 at 9:25 am

[Portion removed due to disrespectful comment or offensive language] No wonder they're mass migrating at the border to live the "American Dream." Let the market work, don't befoul it with a politician's cynicism. Stanford can't afford to build everybody's housing in one of the most (now) desirable places in the world. Into the lesson plan to wake up economic classes: [Portion removed due to disrespectful comment or offensive language] Back to the numbers. [Portion removed]


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