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Billionaire donor for new city gym revealed — and his money comes with strings attached

Original post made on Jan 21, 2022

If Palo Alto were to accept millions of dollars to construct a new gym, it would also have to expedite the project's approval process.

Read the full story here Web Link posted Friday, January 21, 2022, 9:38 AM

Comments (34)

Posted by Kimberly Sweidy
a resident of South of Midtown
on Jan 21, 2022 at 10:34 am

Kimberly Sweidy is a registered user.

Mr. Arrillaga is well known and well respected for giving generously of his time, energy, money and expertise. In my opinion, no one is our government is competent or qualified to take responsibility for a project of this importance, complexity and magnitude.

I'm grateful that Mr. Arrillaga not only recognizes this fact but is willing to take this on.

His contribution to the Ronald McDonald House expansion was invaluable. Truly! (I am a long-time major donor to RMcDH.)

Posted by Paly Dad
a resident of Midtown
on Jan 21, 2022 at 10:40 am

Paly Dad is a registered user.

I agree with Kimberly. Mr. Arrillaga's requirements make perfect sense. I would trust his ability to get us a top notch facility in reasonable time. An experienced developer, he would be far more competent at driving this than our city government.

Posted by A Person
a resident of Southgate
on Jan 21, 2022 at 10:42 am

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John Arrillaga did a great job with the Menlo Park city property at Burgess. He's smart about function and inclined toward beauty. This will be great for Palo Alto.

Posted by Michelledb
a resident of Crescent Park
on Jan 21, 2022 at 10:44 am

Michelledb is a registered user.

Why doesn’t JA just pay fir the whole thing? His insistence that PA pay 10 million is strange to me. Palo Alto has a growing unhoused issue. I would much rather see even one new apartment building for low income folks than a shiny new gym. Both Gunn and Paly have beautiful gyms that can be rented. Cubberly’s gym is also fine. Prioritizing another gym while this city faces real problems feels so sad.

Posted by M
a resident of Old Palo Alto
on Jan 21, 2022 at 10:58 am

M is a registered user.

Is transparency really the main issue here? Given the city's inability to control the scope and costs of large public projects, like the library, parking garage and police station, I can see valid reasons for this donor to insist on controlling who builds it and its scope. It appears he is proposing something better than Parks and Recreation had imagined, and it will be fixed price to the city at $10m.

I'm no fan of developers, but they are probably much better at getting buildings built on time, within scope and on budget than the City is. Hopefully the city won't turn this into another Caltrans Crossing, City Museum or Castilleja, with years of indecision. (Why would somebody not insist on expedited reviews and retaining control given of how hamstrung and out of control large city managed projects have become?)

Posted by Local news junkie
a resident of Charleston Meadows
on Jan 21, 2022 at 11:00 am

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While I applauded the donor’s generosity, to give him so much control is just wrong. Why should a public agency like the city of Palo Alto put itself up for sale to a billionaire, or anyone? This would look horrible! If the donor wants to exercise more control, let him run for city office like everyone else.

Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Jan 21, 2022 at 11:04 am

Online Name is a registered user.

The city's spending $10,000,000 to compete with private gyms makes as little sense as spending $23,000,000 to compete with AT&T et al on fiber to the home for which we signed up with AT&T for a reasonable amount months ago.

Posted by NeilsonBuchanan
a resident of Downtown North
on Jan 21, 2022 at 11:06 am

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This will be an interesting experiment in the art of the possible.

I personally can support the benefits of community health services (aka a "gym" and its programs). I can accept delays for other unclear priorities such as the history museum. Assuming it is within authority of city government, I can support delegation of design and construction process to the proven, competent private sector.

One issue remains. Capital costs of government services often are relatively small compared to ongoing operational costs. City Council has a first-class finance department. City finance staff must be active participants in early financial plans and early service programming with "gym" experts who understand operating/maintenance costs and revenues.

The devil is in the details even with millions of free capital.

Posted by MES
a resident of Palo Verde
on Jan 21, 2022 at 11:17 am

MES is a registered user.

Having a public Palo Alto Wellness Center is an important priority for the City. I am wondering if everyone including Parks and Recreation can adopt the term Wellness Center and leave behind the term Gym. Wellness connotes wellness in every aspect of our being--not just physical health--but whole person health. Having spaces for yoga, meditation, and other activities is as important as having sports courts. Let's give Mr. Arrillaga the opportunity to show us how he can be a thoughtful member of the community. Let's give his proposal a try. We need to find new ways to get things done.

Posted by Rita Lancefield
a resident of Duveneck/St. Francis
on Jan 21, 2022 at 11:31 am

Rita Lancefield is a registered user.

I still can't figure out why we need a community gym when we can't house the people who work to keep the city and schools going. We have two high school gyms, Cubberly, the YMCA and more for-profit gyms than I can count. I can think of so many better ways to spend our $10,000,000 plus overruns share.

Posted by neighbor of PA
a resident of Menlo Park
on Jan 21, 2022 at 11:36 am

neighbor of PA is a registered user.

Don’t accept this money. The buildings he built at Stanford were poorly designed and built and lacking in basic good HVAC systems. What’s up with no good locker room facilities at an athletic building? But he got his name on them—the goal, apparently.

Posted by Bystander
a resident of Another Palo Alto neighborhood
on Jan 21, 2022 at 11:36 am

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Looking at what happened with the new footbridge over 101, it is apparent the City can't get anything done in a reasonable amount of time.

Our youth are forgotten about in Palo Alto. Not everyone can get on a school team, not everyone wants to join an expensive gym such as JCC or YMCA. Where can our youth go on a day where there is no school just to play a pick up game for fun?

Build the facility, get it done quickly. Put your name on it if you have to or whatever else, I don't particularly care. Thank you for your generosity to the well being of Palo Alto residents.

Posted by Carla
a resident of Downtown North
on Jan 21, 2022 at 11:58 am

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The Arrillaga gyms at Stanford are absolutely well-designed and beautiful. The City would be short-sighted to not accept this and allow him to build it under his conditions. It would be a valuable asset to the public good.

However, since he wanted to be anonymous, this gym should absolutely not be named after him.

Posted by Local news junkie
a resident of Charleston Meadows
on Jan 21, 2022 at 12:13 pm

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I wonder, if the city decides to “play by Mr. Arillaga’s rules”, what’s next? What if Mr. Zuckerberg donates millions for another project, but demands control? There are lots of very rich people in the area, and I’m sure most are very nice and public-spririted individuals. But to cede control of the public process to a private individual, no matter what his/her bank account, is undemocratic.

Posted by Palo Alto Res
a resident of Downtown North
on Jan 21, 2022 at 12:15 pm

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Having a public gym would be great. Right now the city pays for leasing it's gym at Cubberly. The facilities of a new public gym would help the city to hold more community events (regardless of weather). An indoor basketball, indoor soccer, indoor volleyball...

Let's try not to examine a gift horse in the mouth. A free health and wellness center, where youth can get help and host free meetings.. talk about win-win.

This will help Palo Alto as a city shine even more. It will be a community center to provide more outreach and provide services and a place for services. Capping the cost of building such a building at $10 million, and having someone step up to oversee the project and cover any cost over $10 million is terrific. Look at how things take forever in Palo Alto and things such as the bridge or dealing with the high speed rail near Alma has exponentially increased in cost as the city did studies and surveys and changed plans and had more consultations and changed their plans and increased costs, and then had more consultations, changed their plans and increased costs.

This proposal sounds practical and financially smart. Get the free public gym built!

Posted by Observer
a resident of Menlo Park
on Jan 21, 2022 at 12:59 pm

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Well naming the gym should be easy and also inexpensive letter-wise.
Ego Gym

Posted by Novelera
a resident of Midtown
on Jan 21, 2022 at 1:41 pm

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A construction company I've worked with has lots of experience with Mr. Arillaga's behavior. His name is on whatever is built but contractors and subcontractors feel like they're working for Scrooge McDuck.

Posted by Midlander
a resident of Midtown
on Jan 21, 2022 at 5:25 pm

Midlander is a registered user.

> Mr. Arillaga's ... contractors and subcontractors feel like they're working for Scrooge McDuck

Oh, if only the City of Palo Alto could drive hard bargains and earn itself such a nickname!

As another commenter noted, commercial developers do seem to understand how to built projects on time and on budget. And, yes, that means driving hard on costs, rather than letting subcontractrors do what they want. If he has actually cheated anyone, that would be bad. But it sounds like he merely watches money closely, which is well and good!

Posted by Nayeli
a resident of Midtown
on Jan 21, 2022 at 5:50 pm

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After some of the wasteful spending and questionable building projects in Palo Alto, I believe that Mr. Arillaga has a good reason to be suspicious of the City. At the same time, I do think that the City needs to pause and consider this proposal. I think that it would definitely meet a need in Palo Alto. People can call him "Scrooge" (or "Scrooge McDuck") all they want, but many residents do see a problem with the way the City of Palo Alto conducts building projects.

Posted by Easy8
a resident of Green Acres
on Jan 21, 2022 at 7:58 pm

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Remember how fast Arrillaga built the sparkling Stanford football stadium? I was at the last game of the old stadium in 2005, you could see the bulldozers off to the side which began demolition within minutes of the game ending. Just 10 months later, a sparkling new football stadium was ready to go in time for the 2006 season.

Posted by Virginia Smedberg
a resident of Old Palo Alto
on Jan 21, 2022 at 8:09 pm

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Good point, M Buchanan: "Capital costs of government services often are relatively small compared to ongoing operational costs." I believe some colleges for example have refused donations for new buildings because of the potential maintenance costs. When I first heard that concept I thought: the best donation from a sensible donor would be titled "The Whoever Donor Janitorial Closet". With a basic endowment fund enough to ensure its ongoing payouts would cover said maintenance for the life of the building. People like their names on big things. But creating future costs for the city is not a good idea - in fact it's unfair to those of us who will continue to live here and thus foot those bills. If Mr Arrillaga really wants his project, he should give enough to ensure it stays functional for its entire life.

Posted by Banes
a resident of Old Palo Alto
on Jan 22, 2022 at 2:23 pm

Banes is a registered user.

I completely agree with Kimberly, Paly Dad et al.
But some of these comments here exhibit exactly WHY the donor has “conditions”.
Leave it to the City Council & nothing happens. Bickering whether a gym is more useful or low income housing should be earmarked for Arriaga’s benevolence is absurd. Its not about low income housing Rita, its about a public community gym. Good Lord!
Arriaga has done this before, many times successfully! He knows Palo Alto can’t get out of its own way other than to nick its own nose, and can’t even stay on track. Its about a community gym nothing else, low income housing is not a gym. Stay on topic.

Posted by Banes
a resident of Old Palo Alto
on Jan 22, 2022 at 2:33 pm

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If the City & City Taxpayers can foot the ongoing park ranger, maintenance, utilities & educational buildings & facilities , insurance liability bills for Foothills Park for the greater public at large (how much does this cost each & everyone on their tax bills annually), I suspect one community gym would be far less expensive to maintain.

Maybe put the gym in Foothills Park so Everyone and their dog & inlaws and outlaws can have free access. That would be very Palo Altoan.

Posted by mjh
a resident of College Terrace
on Jan 22, 2022 at 4:27 pm

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The devil is in the details

When Arrillaga negotiated with the city manager to
replace McCarthur Park with two 100’ office towers he offered to include a new theatre as a public benefit. Many were thrilled and eager to accept the offer. That is, until finding Arrillaga was generously offering an exterior shell with residents to pay all the interior costs.

The question is, in addition to the $10 million Arrillaga requires the city to contribute toward construction costs, will residents have to pay an additional costs to convert an empty shell into a gym? Or is that what the $10 million for?

Posted by RobLancefield
a resident of Duveneck/St. Francis
on Jan 22, 2022 at 4:37 pm

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To Banes. I am not talking about having Arrilaga finance low/moderate housing. I am asking the city to prioritize possibilities. Land is one of our most rapidly dwindling assets as a city and we should not base our decision on how much money we can get from outside but on what our vision a of a future Palo Alto could be.

Posted by Annette
a resident of College Terrace
on Jan 23, 2022 at 12:16 pm

Annette is a registered user.

So much for confidentiality. But the reveal is hardly a surprise. This area may have a long list of millionaires and billionaires, but the sublist of those who are civic-minded and generous isn't all that long. Like his partner, Arrillaga has earned a reputation for being one of those rare developers who uses his wealth for civic projects that benefit many people. Ditto Stanford projects. Easy8 makes a good point. It was Arrillaga who moved earth, literally, to get the Stanford stadium rebuilt in less than a year. If I was making a GIFT of $35 MILLION to a city like ours, I'd attach some conditions. Who wouldn't?

It would be exceedingly wonderful if a consortium of area developers gifted money for a homeless shelter or some truly affordable housing, but as others have pointed out, housing is a quagmire. Furthermore, they might question the need to donate towards housing and homelessness in a state that has a $30 BILLION surplus that can be used to address those issues. Frankly, instead of amassing such a surplus, wouldn't it have been more responsible (and kinder) to have already spent some of that money on shelters so that people weren't out on the streets this winter? It's pathetic to politicize homelessness.

Posted by community member
a resident of University South
on Jan 23, 2022 at 4:56 pm

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I would respect Arrillaga if his values weren't so low.
2-seeing his name broadcast on all his projects. When I see a building with
his name boldly displayed, I have same reaction as I do to a building called Trump.
Namely, Yuk.
Macho hyper-masculinity on a multi-million dollar scale.

Posted by Banes
a resident of Old Palo Alto
on Jan 24, 2022 at 9:06 am

Banes is a registered user.

To "community member" if you don't like civic-minded, benevolent or wealthy people's names on buildings, why don't you fund and sponsor a community structure or at minimal provide free ongoing janitorial services for same. What kind of a single-minded remark is that? Clearly you don't have children, grandchildren or any personal interest in sports whereby any benefit from learning how to play with others vs. solo fixation with a bottomless pit cell phone/computer game. Have you ever been to any hospital, Lucille Packard Children's Hospital or Ronald McDonald's? They all have donor's names in various forms, on brings, walls, wings, specialty departments. Mayo Clinic?

As for bringing up low income housing with this discussion. It is an entirely different City planning that requires State/Fed funding as it benefits a few, select vs. benefitting an entire community. Its an entirely different beast and not on the same tax or community benefits category.

Anyone remember Steve Jobs wanting to sponsor and pay to have the local city park nearby his house renovated? Palo Alto City turned him down. That park today would have simply been one of the nicest parks in town, no name entitlement involved. The Politics of Palo Alto are slow and go nowhere left to themselves.

Posted by JS1
a resident of Another Palo Alto neighborhood
on Jan 24, 2022 at 8:44 pm

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Web Link

Posted by Pat Markevitch
a resident of Downtown North
on Jan 24, 2022 at 9:00 pm

Pat Markevitch is a registered user.

John Arrillaga passed away today RIP.

Posted by DebbieMytels
a resident of Midtown
on Jan 25, 2022 at 11:56 am

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I agree with Rita Lancefield. What do we need another gym for? We need funds for housing, instead! Now that Mr. Arrillaga has passed away, let's turn down this silly offer and, as another commenter said, forget about the on-going operating costs that would further drain the city budget.

Moreover, allowing a precedent that would have the private sector take over community functions like plan approval can only lead to disaster over the long run. Look at what happens in Third World countries when buildings are constructed without attention to proper plans and building inspection.

Posted by Paul Wick
a resident of Charleston Meadows
on Jan 25, 2022 at 12:31 pm

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A true and sincere gift should come with no strings attached.

Posted by Bystander
a resident of Another Palo Alto neighborhood
on Jan 25, 2022 at 3:57 pm

Bystander is a registered user.

Sad news about the demise of said donor who by all accounts is going to be missed. RIP and my sympathies to his family.

Of course we have no idea if this offer will still be standing.

Saying this, of course we could spend a whopping billion dollars to help the homeless and there would still be homeless people in the area. Throwing money at the problem will not solve the problem and will only make it appear that something is being done.

Youth in Palo Alto are forgotten by City Council. Our parks are overrun with leagues and organized groups. Teens are told they are too old to play on a playground, so what is there for them? A skate park has been proposed but nothing has been done. This is the Palo Alto way. A bike bridge took forever and was way over initial cost estimates due to Palo Alto shenanigans. It is about time we, the residents, were able to get something in a timely manner that we can use without having to wait years for it to happen.

Posted by Green Gables
a resident of Duveneck/St. Francis
on Jan 25, 2022 at 5:01 pm

Green Gables is a registered user.

Hey Bystander, California will never solve the homeless problem. Oh heavens some of those homeless do not want to be housed, and California has a law that says nobody can be forced inside. Stupid law.

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