After a discussion that stretched for more than five hours and featured close to 50 public speakers, the council voted 7-0 early Tuesday morning to reject a staff recommendation for a June ballot measure on an ambitious proposal known as 27 University Ave. (Mayor Yiaway Yeh and Councilman Larry Klein recused themselves because of their spouses' connections with Stanford University, which would benefit from the project).
The concept, pitched by billionaire developer John Arrillaga, involves building four office towers and a theater near the downtown transit hub; relocating the historic building that now houses the MacArthur Park Restaurant; and adding a host of pedestrian- and bike-friendly amenities to the area around the Caltrain station.
Instead, in what Councilman Pat Burt called a "significant recalibration of the process," the council voted to continue pursuing a "master plan" for the central site between Palo Alto and Stanford University and to consider, in addition to the Arrillaga proposal, other possible uses for the 4.3 acres. And after hearing extensive criticism from the public about the lack of transparency in the process, the council agreed to hold at least two community meetings, in addition to the regular public meetings involving the various land-use commissions, on the master plan before it's adopted.
The discussion was dominated by comments from the public. More than 120 residents showed up to the hearing, filling up all the benches in the Council Chambers and occupying many of the folding chairs set up for the overflow crowd. Some speakers, including those from the theater and business communities, praised the concept and urged the council to go forward with Arrillaga's plan. But the majority, including two former mayors, took the opposite stance and argued that the council is moving far too fast with the dramatic proposal. Many said that the proposed buildings, at more than 100 feet tall, are out of scale with the area.
Others decried what they said was a lack of transparency in the process. As the Weekly reported last week, many of the early discussions of the plan had occurred in private meetings between Arrillaga and staff, leaving behind scant documentation. The developer had also held private meetings with individual council members to pitch his project months before it was first publicized in March of this year. Some took exception to this conduct and with staff's recommendation to proceed with an advisory measure on the project in June despite the fact that there still hasn't been a formal application, much less an environmental analysis.
Former Mayor Dick Rosenbaum told the council that the project would be a windfall for Stanford University, which he estimated would get about $15 million a year in income from leasing space in the new office towers (Arrillaga, a longtime Stanford benefactor, plans to donate the new buildings to his alma mater), but a terrible deal for the city. He said the city should demand half the revenue from the developments.
"This is a project that would've been laughed out of the Council Chambers a few years ago," Rosenbaum told the council. "Yet here it is being considered seriously. If you proceed, there will almost certainly be a referendum, and I believe it will be successful. You will save the city a lot of money if you stop this project tonight."
The council didn't stop the project, but members agreed to slow things down a bit. Burt recommended continuing with a master plan for the site and expanding the plan to consider other development options. The process for 27 University, Burt said, "has gone sideways for a variety of reasons."
"The best way for us to move toward something that both has a good chance for community support and good design outcomes is to go ahead and invest in this open Palo Alto process," Burt said. "We come up with a site master plan and we find out whether we have a developer who is interested in proceeding within the framework that we set up."
Councilwoman Karen Holman agreed that it's premature to bring the project to the voters, given the lack of information about the project and its impacts. But, like Burt, she agreed that the office towers envisioned by Arrillaga, staff and consultants are far too tall for the site. Though the revised plan that the council saw Monday evening reduced the height of the tallest office tower from 162 feet to 114 feet and the number of stories from 10 to seven, it would still loom far above the city's height limit of 50 feet for new developments.
"This, as currently presented, is just too ambitious," Holman said. "This is an ambitious community, but this is overambitious, and the process has been upside-down."
Former Mayor Dena Mossar was one of many speakers who shared Holman's feelings. Mossar argued that a June election would make little sense given that there's no real project and no environmental-impact report. She also voiced concerns about the city's lack of transparency.
"The master-plan process has relied on secrecy and limited public input," Mossar said. "It's pretty hard to trust the process."
Former Councilwoman Emily Renzel said the process "has been corrupted by private meetings and negotiations." Former Vice Mayor Enid Pearson said the project "has side-stepped every possible public input opportunity." And Fred Balin, a College Terrace resident and advocate for land-use transparency, called the city's conduct on 27 University "secretive" and "improper." He also urged the council not to proceed with the advisory vote.
"We need more ethics, spine and responsibility to residents," Balin said. "Run this process properly."
Councilwoman Gail Price took exception to some of the criticism from the public and said she felt "very uncomfortable with the comments implying some hidden agenda by the staff." She said there's still a "long way to go" in the decision-making process for the site and plenty of time for additional negotiations. She also emphasized the significant benefits proposed by Arrillaga, including new roads and pathways around the transit station and a new theater, which would be occupied by the nonprofit TheatreWorks. Under the proposal, Arrillaga would construct a shell for the new performing-arts theater while TheatreWorks would build the interior.
The theater company currently has what Managing Director Phil Santora called a "nomadic existence," shuttling its operations between Lucie Stern Community Center in Palo Alto and the Mountain View Center for the Performing Arts. The instability that this causes, Santora said, stretches the company's financial resources and limits the programming it can offer.
"The theater proposed as a part of this project is exciting to TheatreWorks not because of its design or because it's new. It's exciting because of the possibilities it provides for delivering our mission," Santora said.
Council members and numerous residents, particularly from the business community, also talked about the project's potential for re-energizing a centrally located but long-neglected site that connects town and gown. Barbara Gross, general manager of the Garden Court Hotel, commended staff for its effort to partner with Arrillaga on developing the site. Jim Rebosio, general manager of the Sheraton Hotel, called the public's concerns "legitimate" but said he supports the project.
"This is such a unique opportunity, and once it's gone, it's gone," Rebosio said. "It's a great opportunity to bring the mall together with the downtown."
The council agreed to proceed with the master plan for the site around 27 University and to consider other alternatives for the area. The council also specified that the master plan should be informed by the city's various land-use vision documents, including the Comprehensive Plan and the recently completed Rail Corridor Task Force. Under a proposal recommended by Burt and accepted by all his colleagues, the master plan would include at least two other alternatives compatible with the city's urban-design guidelines. Each would also include a theater as an anchor.
"I think what happened is that we have ended up reacting to the vision and intention of the prospective applicant — because we don't have an applicant yet — and we have building designs that are not consistent with the small urban fabric of our downtown," Burt said.