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As part of preliminary terms of a development agreement between Stanford and the city of Menlo Park, Stanford officials have said the university will pay for half of the cost – up to a maximum of $5 million – to build a tunnel or overpass to allow safe crossing of the Caltrain tracks at Middle Avenue in Menlo Park.
The Menlo Park City Council is expected to consider the terms of the development agreement for Stanford’s proposed project a 500 El Camino Real at its meeting on Tuesday, Aug. 29.
Under the proposed agreement, the city will administer the crossing project, but Stanford will help pay for it. A study by consultants from the transportation firm AECOM to develop preliminary designs for the crossing is in progress.
The university also agreed to provide additional below-market-rate housing – a total of 10 units, two or three units beyond what is required as part of the city’s below-market-rate ordinance – and to donate $1 million, or $100,000 for 10 years, to the Menlo Park-Atherton Education Foundation.
The council subcommittee, made up of council members Peter Ohtaki and Ray Mueller, is not currently recommending that the council approve all of the terms of the development agreement. The subcommittee has requested that Stanford provide an additional $500,000 to the Menlo Park-Atherton Education Foundation.
The council may also consider requesting that five of the 10 below-market-rate apartments be offered rental priority to teachers in the Menlo Park City School District, according to Chip Taylor, assistant city manager.
The preliminary agreement also stipulates that the public have access to a plaza proposed at the development from 6 a.m. to midnight daily.
The offer comes as the university is preparing for a hearing that could grant final approval to its proposed project. The whole project is expected to face final review by the Planning Commission on Monday, Aug. 28, and by the City Council after that. Final environmental documents can be accessed here.
The university has proposed to build 215 one- and two-bedroom apartments at the site, plus three office buildings totaling 144,000 square feet, and 10,000 square feet of retail and restaurant space.
The project will also have a large public plaza that is expected to have seating, movable furniture, landscaping and a flexible space for events, plus 930 parking spots in an underground parking garage and on surface space.
Some have argued that the city should negotiate a hard bargain because Stanford won’t have to pay property taxes on buildings used for academic purposes, which includes the apartments that will be rented to Stanford faculty and staff.
Stanford technically isn’t required to do a development agreement – typically, those are needed only when a developer proposes to build at a higher level of density beyond a “base” level – but the process helped to pinpoint exactly what the university’s commitment would be toward the bike and pedestrian Caltrain crossing. For years, the university had said it would “contribute significantly” to the costs of the project.
Steve Elliott, Stanford’s managing director of development, said that over the last four and a half years since the project was submitted, “a lot of issues have come up,” but that those issues have been addressed. “Will there be others that come up until (the project is) finally approved? Probably. But we feel confident we’ve presented a project the community’s going to love,” said Mr. Elliott.
Traffic
Stanford officials Jean McCown, John Donohoe and Steve Elliott met with the Almanac to discuss some of the ongoing concerns locals have with the project.
On the transportation front, Mr. Elliott said, the expected traffic from the project is about one-third less than what was projected in an environmental analysis conducted at the time the city’s downtown specific plan was developed.
From previous iterations of the project, Stanford has increased the amount of housing, eliminated medical office space and decreased the amount of office space, he said, all steps that reduce the number of trips the development’s tenants are expected to generate.
Stanford also charges for parking on-campus, which gives commuters extra incentive to find another way to work, Ms. McCown said. University employees also get Go Passes, which are free Caltrain passes, and can take Stanford buses that travel throughout the area, including across the Bay, she noted.
The types of tenants for the new office buildings are expected to be comparable to those on Middlefield or Sand Hill roads in Menlo Park and likely to be in the venture capital or private equity industries, Mr. Elliott said.
Housing
In a separate hearing held Aug. 23, the Housing Commission voted 3-2 to recommend that the Planning Commission approve Stanford’s proposal to meet its below-market-rate housing requirement by providing 10 one-bedroom apartments to the city’s below-market-rate housing supply. (Commissioners Michelle Tate and Meg McGraw-Scherer were opposed, commissioner Nevada Merriman recused herself because her husband works for Stanford, and commissioner Julianna Dodick was absent.) The units will be restricted to rent by low-income tenants, said Jim Cogan, housing and economic development manager in Menlo Park.
The 10-unit below-market-rate housing total was calculated based on the following: five or six from the commercial space proposed at 500 El Camino Real, two from commercial space Stanford proposes to develop at 2131 El Camino Real, and an additional two to three units resulting from negotiations between the city and the university in the development agreement.
Housing commissioners who opposed the below-market-rate housing agreement said they wanted some of the dedicated BMR units to be larger apartments, to offer lower-income families access to Menlo Park schools; they also wanted more of them.
“This is basically a situation where (the developer) is following the rules,” said Commissioner McGraw-Scherer, citing the development’s prime location for affordable housing, near transit and downtown. “I just don’t like the results.”
The other apartments, Mr. Elliott said, are likely to be rented at below market rate to Stanford faculty and staff but will not be part of the city’s BMR program.
The City Council will meet at 7 p.m. for its regular business on Tuesday, Aug. 29, at the City Council Chambers at 701 Laurel St. in the Menlo Park Civic Center. Access the meeting agenda here or stream it online here.
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Nice to read progress towards resolving the long-standing development issues with this location. I’m very pleased that a bike crossing of some type will result. The crossing must be coordinated with the rail project to determine if a tunnel or bridge is the right solution.
Steve Taffee
I am pleased that this project is moving forward but believe the agreement with our city can and should be significantly more favorable to our residents/taxpayers.
1. Stanford should bear a greater share of the cost of the bike/pedestrian tunnel as Middle Plaza workers, residents, visitors and shoppers will be the PRIMARY beneficiaries.
2. The fees paid to the MPEF should have a much longer term and be linked to inflation.
3. The city needs to approve a comprehensive traffic mitigation plan for the Allied Arts neighborhood and Middle Avenue.
4. The ECR bike crossing on Middle – also a city responsibility – requires a creative design with protected bike lanes on Middle between University and El Camino. The design should not encourage bicyclists to freely cross the entrance of the Safeway Plaza. This will be a big challenge due to the narrow existing street width.
No property taxes? Nice loophole there. Despite all the fluff about supporting the community, turns out they’re just moochers.
No property taxes and a single parcel tax for 215 units! That is going to have a big impact on our schools with very little revenue to follow those students. The $100k for 10 years that Stanford is offering is a drop in the bucket when our MPCSD per student spending is $14,200. This will barely cover 8 students a year, assuming those parents will provide their own PTO/MPAEF donations – and only for 10 years. Based on other new housing in the area, we know there will be many, many more students who attend the schools. MPCSD is funded 62% from property taxes; 16% from parcel taxes; and 10% from MPAEF & PTO donations. State and federal funding is only 12% of the revenues to the district. For each student in this housing who attends MPCSD schools, Stanford should be paying the per pupil spend that our community covers for our kids.
And what about Sequoia Union School District (Menlo-Atherton High School)? It relies on property taxes, too, to fund our public high school.
A wide, brightly-lit bike/ped underpass (as can be seen at nearby Homer & Alma in Palo Alto) is far superior to an overpass. Compare to the only Caltrain pedestrian overpass at Bayshore station: http://www.sfcta.org/sites/default/files/content/Planning/Bayshore/BayshoreStation_corrected.jpg (huge and ugly, requires elevators at both ends for ADA-mandated wheelchair accessibility since there’s no room for adequately-long gently sloping ramps on both ends).
A bike/ped underpass:
• low profile (invisible)
• easier for bikes, ped & wheelchairs to use (small level change — just enough to leave room for people with headroom)
• no conflict with the Ravenswood grade separation study design alternatives
A bike/ped overpass:
• unsightly & high profile (must rise nearly 30 feet over tracks to safely clear high-voltage Caltrain electrification wires)
• harder for bikes, ped & wheelchairs to use (climb & descend nearly 30 feet — easily double that of an underpass)
• requires extra fencing and/or barriers to prevent vandals from throwing objects or pouring liquid onto passing trains and the 25,000 volt overhead wire and train pantographs (power pickup arms)
• could conflict with the Ravenswood grade separation study design alternatives
Whlle the tracks are currently “at grade” in the vicinity of Middle and Burgess, a tunnel is particularly obvious (and more of a no-brainer) as you get closer to San Francisquito Creek (e.g. at Willow), since the Caltrain tracks slope upward onto a high berm, so punching or ducking under the tracks with minimum level change there is even easier.
The Stevens Creek Trail bicycle/pedestrian tunnel under El Camino Real in Mountain View is very nice. Not too steep for wheelchair users and wide enough for 2-way traffic to pass safely. I agree that a bridge could be too difficult for some users.
Subject: Negotiate A Better Deal For Menlo Park Residents
The City of Menlo Park should reject the proposed development agreement re: Middle Plaza and adopt a totally different approach to the current negotiations. Here are the benefits and negative impacts each party would experience with the current proposal.
Impact on Stanford
Effectively expands its campus in a great location. Both the new housing and offices can directly or indirectly serve Stanford interests. Stanford has already said that its own community will have priority re: housing.
Stanford gains pedestrian and bike access to Alma and west side destinations via a tunnel. Without the tunnel Middle Plaza workers and residents who wish to bike and walk have severely limited route options.
Stanford does NOT pay property taxes on its new residential properties.
Impact on Menlo Park
An eyesore, one Stanford created and maintained on the El Camino lots, is removed.
Menlo Park receives property taxes on the commercial space and a modest amount of retail sales tax.
The Menlo Park Education Foundation receives $100,000 a year for ten years.
(less than a single gift from some individual donors)
Stanford pays up to $5m of the cost of the new pedestrian/bike tunnel which likely will not be available for at least another five years.
Menlo Park residents experience significantly more traffic on El Camino and neighborhood streets
Recommended Strategy
1. Establish a “walk-away” economic position that must be achieved or Menlo Park does NOT approve a development agreement.
2. If the walk-way position is not achieved within a pre-determined time frame, e.g., 90 days, Menlo Park should
• Modify the Specific Plan regulations and require that Stanford submit a conforming project.
– Require that Stanford remove the buildings on its properties within 6 months and maintain the property per city requirements.
Recommended Agreement Terms
1. Stanford pays $150,000 annually to the Menlo-Atherton Educational Foundation for a term of at least 15 years to compensate for the lack of residential property taxes. This fee should be adjusted for inflation.
2. Stanford pays at least 75% of the actual total costs of building the pedestrian/bike tunnel.
3. Stanford pays for traffic mitigation measures on Middlefield and nearby neighborhoods.
The proposed development is a sweetheart deal for Stanford. What Menlo Park residents deserve is a very small and affordable fraction of the costs and benefits Stanford expects from Middle Plaza and we expect our representatives to get it. The recent Mayweather – McGregor fight is a reminder that ill-equipped opponents suffer. Menlo Park should negotiate from a position of strength and acknowledge it is willing to allow the Middle Plaza land to become pasture rather than accept a lop-sided deal.
Finally, Menlo Park should be alarmed – and take whatever protective action legally possible – if Stanford continues to purchase private residential property in our city and shrink our property tax base.
@Dana
Rental units by their nature not a great property tax sources. the rent is non-taxable and the only value comes from the taxes on their build.
Stanford is a tax exempt educational institution and is legally eligible to not pay taxes on certain portions of the build. They have instead decided to contribute $1M to our local schools (voluntarily) and another $5M to the bike/pedestrian underpass.
They have been GREAT community citizens, and what you are describing is asking them for MORE money. Everyone (i.e. Palo Alto, Portola Valley, etc) think they are an endless fountain of money. Menlo Park doesn’t own the land Stanford does and they have complied with every requirement (BMR, Energy Savings, etc.) we put at them…….we need to stop asking them to fix OUR problems.
As you know the Planning Commission approved the project last night and sent it to the City Council.
Roy Thiele-Sardina
“Since Stanford plans to use the apartments for staff and faculty housing, the university will not be required to pay property taxes on those units.”
Why don’t we fix this aberration in the property tax code? And, while we’re at it, do the same for the SMCCCD housing at Canada College? These properties should be paying the same taxes as their neighbors.
“The development agreement also stipulates to pay $1 million over 10 years to the Menlo Park-Atherton Education Foundation, which raises funds for Encinal, Oak Knoll and Laurel elementary schools and Hillview Middle School.”
This is a convoluted scheme to hide the true cost of the government education system.
“City Attorney Bill McClure said Stanford already leases about 180 apartments in the city of Menlo Park to house its students, faculty and staff, and gets a property tax exemption on those. Some of those residents might move into the Middle Plaza apartments and not add to lost property tax revenues for local schools.”
Hello! What kind of nonsense is this? Go back and do your homework, Bill.
Roy: I like the proposed Stanford Middle Plaza but not the proposed development agreement. Stanford understandably wants the best deal possible; and Menlo Park should pursue the best one, as well. A $5M maximum cap on it’s funding for the tunnel is NOT acceptable. Does anyone have a good estimate of the total tunnel ACTUAL costs? Keep in mind construct ion will likely not start for another 5 years when costs are higher than now. Middle Plaza workers and residents will be the primary beneficiaries so Stanford needs to fund a greater share of the ACTUAL costs.
The biggest losers in this agreement are the other property owners of the Fire District which will provide services to this development that will now have to be paid for by the other property owners in the Fire District.
@Peter,
Come on, you KNOW that the retail and office space will pay FULL taxes. Please don’t confuse the public….
Roy
@Jack & Peter
Please enlighten us about the taxes the Fire District plans on paying on the property (HOuse) they just bought next to the Atherton Fire Station….tax exempt right Peter?
Roy Thiele-Sardina
All property should be subject to the same taxes. It’s part of the cost of doing business. Whether your business is raising a family, providing government services, manufacturing, retail, medical services, theological services, etc. How those businesses are funded is another subject.
“on paying on the property (HOuse) they just bought next to the Atherton Fire Station….tax exempt right Peter?”
When it is rented that property will pay taxes based on its full tax value – as ray FULL well knows.
@Roy,
The problem is that Stanford’s buildings require fire and public safety protection. Their residents have the ability to attend local schools. The residents can take advantage of all the services Menlo Park offers, but pay nothing for it, even if they are professors making six figures a year.
And all this is subsidized by their neighbors, some of which are struggling to continue to live in this high-priced area.
With an influx of residents, but limited net gain in taxes, local government entities are forced to raise taxes. Then, these new residents get to vote yes on all of them, but not have to pay for any of it.
Roy – How much will Stanford pay WBSD is connection fees for the 500 ECR project?
– Will not offices that Stanford uses for “educational” purposes also be exempt from property taxes? But not from WBSD connection fees?
Tim: you are correct. Whether residents have children who attend our schools or not, all will benefit from community services: fire, police, public works, parks, etc. at a cost to Stanford of only $100,000/year for ten years. And on a discounted cash flow basis this figure will amount to much less in current dollars. This is a lousy deal for taxpaying Menlo Park residents and should be rejected.
This deal sucks. I supported development of this property when the idea was it would NOT house Stanford employees as that would not generate property tax revenues that will be very necessary to take care of the residents of the residential portion of this project. Stanford either needs to NOT use it as housing for Stanford employees OR pay whatever the property taxes would actually be if it wasn’t tax exempt. If Stanford won’t step up and do that, then forget it.
As much as I hate the blight of the vacant lots I am unwilling to carry the tax burden for Stanford. The Stanford that is worth billions of dollars. I’ll take teh blight before I carry a billionaires water.
Menlo City Council are you listening? This is a crappy deal. Demand Stanford pay their fair share. This deal doesn’t make that happen.
If I may be so bold, Menlo Park should eminent domain the land, then sell it to the highest bidding private company.
This does two things:
1) Resets the Prop 13 land basis to market value
2) Eliminates the property tax exemption
Under eminent domain, Menlo Park is required to pay Stanford the fair market value. Fair market value is what Menlo Park is getting paid by the highest private bidder. Some legal logistics fees aside, Menlo Park will not be taking any financial risk.
The upside is that Menlo Park, the school districts, the fire district, and all other local agencies will be made whole in the financial burden this new development puts on them.
And to make it fair for Stanford, the private developer should allow Stanford people to have first dibs on renting the apartments. Stanford people won’t receive discounts. They just get to be first in line before anyone else.
If Stanford is a nonprofit, it should not delve into the for profit space and conduct real estate development. Otherwise, the people of California are giving non-profits an unfair competitive advantage, plus asking other taxpayers to pick up the slack Stanford eschews. Stanford can just sit on a massive amount of land, pay no tax, and just wait until it becomes ripe for development, then make a massive profit.
Private enterprises don’t do this because when they buy acres of land, it requires lots yearly property taxes.
The purpose of Stanford’s tax exemption is to support education. It is not meant to enrich itself at the expense of its neighbors….but that’s what it has become.
And if you’re wondering if eminent domain would be allowed as the land will be turned over for private use, the Supreme Court says yes.
https://en.wikipedia.org/wiki/Kelo_v._City_of_New_London
Tim:
I like your idea, but our City Council doesn’t have the political stones to make it happen. Best we can hope for is for them to make Stanford to actually pay their fair share.
@Peter,
I don’t know the final number for the WBSD hookup. But as you know the majority goes to Silicon Valley Clean Water for the sewage plant.
I know that their fees will partially subsidize the cost of increasing the size of the main to accommodate the sewage they will produce.
Roy
Roy – Exactly – Connection fees and impact fees go to increasing the CAPACITY of the public service activity necessitated to larger demands for services, not to pay for its operating costs.
Note that the Kelo decision did not turn out very well for the city that exercised eminent domain:
“In spite of repeated efforts, the redeveloper (who stood to get a 91-acre (370,000 m2) waterfront tract of land for $1 per year) was unable to obtain financing, and the redevelopment project was abandoned. As of the beginning of 2010, the original Kelo property was a vacant lot, generating no tax revenue for the city.[2] In the aftermath of 2011’s Hurricane Irene, the now-closed New London redevelopment area was turned into a dump for storm debris such as tree branches and other vegetation.[13] As of February 2014, it was still vacant.[14][15]”
@ Roy “Come on, you KNOW that the retail and office space will pay FULL taxes. Please don’t confuse the public….”
Let’s see, Stanford is subleasing offices throughout Menlo Park and the landlords get to exempt that space from property taxes. Friends at Stanford tell me that the space is already allocated in the new 1.5 million SF campus in Redwood City that is under construction. Who’s to say that Stanford won’t find a need for academic use of the offices in this project, too?
Don’t count on property taxes except on the retail space that is <5% of the project. Whoopie.
You wouldn’t make a business deal without calculating the financial impacts would you? Why is it ok for the city to negotiate a business deal without having that information in hand?
Don’t say that they were not warned:
Posted by Peter Carpenter
a resident of Atherton: Lindenwood
on Jun 21, 2015 at 5:25 pm
Peter Carpenter is a registered user.
Sadly, there are folks who will oppose anything that Stanford proposes for this site – and if they get their way then Stanford can just build a totally conforming property tax exempt facility with no sales tax and no public amenities and no contribution to a pedestrian tunnel.
@ Peter, Stanford will do what is in their best interest. What they are doing has everything to do with pressures to find housing and maximize their financials. That is normal and to be expected. At the same time, we expect our Council to understand Menlo Park’s needs and protect the city’s financials. Where is the information about the monetary impact of providing services to this project’s tenants, to designing and building the bikeway and crossing (tunnel)? That information should be in hands before any negotiation starts, and for sure before any negotiation ends.
It would be interesting to see the letters from the City to MPCSD and MPFPD asking them what the impact of this proposed development would be on those agencies.
Sadly such letters will never be seen because they were never written.