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Stanford, Palo Alto close to deal on hospital expansion

Aggresive $126 million traffic-calming package helps accelerate negotiations

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By Gennady Sheyner

Embarcadero Media

Stanford University's ambitious expansion of its hospital facilities will come with an equally ambitious traffic-management program that university officials hope will unclog some of Palo Alto's busiest intersections and smooth Stanford's path toward the city's approval.

Palo Alto and Stanford University have agreed on an aggressive $126 million package of traffic improvements, including expanded shuttle services, better pedestrian and bike paths, road upgrades and Caltrain Go Passes for more than 9,000 hospital workers.

The traffic measures, which the Palo Alto City Council discussed Monday night, aim to alleviate the city's top concern about the hospital project and accelerate Stanford's negotiations with the city over a "development agreement."

The project includes the construction of a new Stanford Hospital and Clinics building, expansion of Lucile Packard Children's Hospital and reconstruction of various Stanford University School of Medicine facilities. It would add about 1.3 million square feet of new development to Palo Alto and far exceed the city's zoning regulations.

The university has offered to include the traffic-reduction measures as part of a $173 million package of "community benefits" it proposed on Jan. 18. Stanford is willing to include the benefits in a development agreement with Palo Alto.

The measures include four new Margueritte shuttles to whisk commuters from transit stations to the hospital. Stanford would also provide Caltrain Go Passes to all hospital employees -- a measure that the university estimates will cost $90.1 million over the next 50 years. If Caltrain services cease because of budget problems, the funds would be directed to other traffic-reducing measures.

Stanford also proposed to provide a permanent transportation-demand management (TDM) coordinator and to spend $3.35 million to improve pedestrian and bicycle connections around the hospitals and to lease spaces at Ardenwood Park in the East Bay so that employees could use AC Transit to get to work. The university plans to spend $5.1 million on programs related to AC Transit.

Palo Alto Deputy City Manager Steve Emslie said the traffic improvements proposed by Stanford would mitigate traffic impacts at some of the city's busiest intersections -- including University Avenue and Middlefield Road, and El Camino Real and Palm Drive -- to "less-than-significant levels." The program aims to get 35.1 percent of commuters to eschew cars for other modes of transportation.

If Stanford is unable to meet the 35.1 percent alternative mode share by 2025, it would have to pay the city $4 million, under an agreement currently on the table.

Emslie said the goal remains extremely ambitious, but noted that Stanford already has a world-class traffic-management program at its academic campus next to Palo Alto. It also helps that the hospitals already enjoy an alternative mode share of more than 22 percent.

"If we achieve the same commute diversion that is currently being experienced by the university on campus, we believe we can hit the very aggressive goal for 35.1 percent," Emslie told the council.

While Palo Alto and Stanford officials agree that the traffic measures would greatly benefit the city and reduce the project's impacts, officials from the two sides remain at odds over how these projects should be classified. While Stanford is characterizing the traffic measures as "community benefits," Palo Alto officials believe they constitute "mitigations" that Stanford is legally required to provide to comply with state environmental law.

Emslie said the city and Stanford have "agreed to disagree" on how to classify these traffic improvements, but praised the proposed measures as ones that would "significantly improve the community by providing access to better transportation, providing incentives, removing single-occupancy vehicles from the streets and supporting public transportation."

Council members praised Stanford's proposed traffic improvements as exactly the type of programs the city should support for major development projects. Councilman Pat Burt called it a "well-designed program" and "the right thing to do." He said such a program is needed to both mitigate Stanford's impacts and make sure the city continues to have economic growth.

Stanford had proposed the traffic programs as part of a larger list of community benefits, including $7 million for health care programs in the community and $12 million for climate change and sustainability projects.

Staff has estimated Stanford's package of benefits (not including the traffic measure) to total about $50.9 million.

Palo Alto and Stanford remain split on several issues, including a requirement that Stanford provide the city a "revenue guarantee" to make sure the hospitals don't overburden the city's General Fund. While city officials have called for such a guarantee, Stanford has proposed a single $1.1 million payment to account for possible impact on the General Fund.

But several council members said they were happy about the latest progress on the negotiations, which City Manager James Keene described as the "last couple of miles" in a marathon. Vice Mayor Yiaway Yeh said council members "finally see an end in sight." Mayor Sid Espinosa agreed.

"I'm very hopeful tonight," Espinosa said near the conclusion of the meeting. "I can see we're very close to an agreement and closure."

The council plans to vote on a development agreement with Stanford in April.

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