When Palo Alto school district trustees saw the first draft of a much-anticipated agreement with Stanford University related to the university's proposed expansion, they expressed concern about a provision that, as it turned out, would ultimately spell the undoing of the deal and the suspension of further talks.
The benefits Stanford had tentatively agreed to provide were conditional on the approval of a development agreement between the university and Santa Clara County. Board members, who wanted the agreement to be conditional instead on the county's approval of Stanford's general-use permit (GUP), directed Superintendent Don Austin on April 10 to counter, they said in interviews with the Weekly.
The district communicated to Stanford that it wouldn't move forward with a conditional agreement, Vice President Todd Collins told the Weekly, throwing the deal into uncertainty. Austin said the district and Stanford's negotiating teams, who had met for two days in late March to work out the deal, were "working through multiple issues" up until several minutes before publicly releasing the terms of the agreement on April 15.
"What had been a fully negotiated deal was at risk for a period of days," Collins said.
Stanford's response to the district's request for a non-conditional agreement, Austin told the Weekly, was that "it was not a position that they felt they could bend on."
The district conceded, reasoning that a conditional deal was better than no deal — especially after Stanford had for many months been unwilling to offer any kind of mitigations to the district, Austin said. On April 15 they announced a tentative, conditional agreement to provide the district an estimated $138 million over 40 years.
"While it made more sense to me that it be conditional on the GUP itself, if Stanford was unwilling to do that at the time we either could walk away from the whole agreement or accept it as it was," said board President Jennifer DiBrienza. "It seemed reasonable to me that we accept it as is and continue to support a development agreement and all the other mitigations that we wanted our community to see."
Instead of proceeding with development-agreement negotiations, however, the county decided to suspend them, saying that the contingency clause would provide Stanford unfair leverage during talks.
In a statement provided to the Weekly, Stanford said that "it was understood throughout our discussions with (Palo Alto Unified) that benefits for the school district would be conditional on a development agreement and that Stanford would seek to include the outcome of those talks in the development agreement process with the county.
"The university believes a development agreement is needed because it will provide certainty over the long term about the total package of community benefits that will be provided as development occurs on the Stanford campus," the statement reads.
Austin and some board members said they were taken aback by county Supervisor Joe Simitian's critical comments on April 15 about the deal, in which he called it "regrettable" and a bad-faith effort. Board members said he had encouraged the district and Stanford earlier this year to resume talks. DiBrienza said the first time she heard from Simitian that a conditional agreement would be unacceptable was during a phone call on April 12.
Austin said Simitian had communicated to him examples of provisions that the deal shouldn't be contingent on but did not mention the development agreement.
Austin said that the contingency clause was not explicitly discussed during negotiations but that Stanford had expressed that "without a development agreement they didn't see a path to a project."
"After the better part of the year going back and forth with Stanford and those couple days of very serious, good-faith negotiations, we felt like the places where we've come together and had agreement were worth sharing," he said.
"Signing a non-conditional agreement that is never executed because Stanford can't reach a development agreement is no more valuable than having an agreement that both sides publicly are committed to," Austin added.
Vice President Todd Collins said the board understood the contingency was important and that he anticipated that it could be problematic for the agreement. (Collins, whose spouse works at Stanford, participated in GUP discussions until an April 16 special meeting, when he recused himself.)
However, he said, "Part of a negotiation is you don't always get what you want and the negotiating team's job is to try to get the best deal they think can be gotten. ... They did a good job working through a process to get a deal on the table for us to consider."
The school district has refused the Weekly's Public Records Act request for the agreement drafts and other communications between it and Stanford as the deal was negotiated in early April, citing a litany of reasons, including that they were only drafts, that they are subject to deliberative process and attorney-client privileges and that the California and U.S. constitutions granted it authority to withhold the material. Of 21 attachments related to the request, the district fully redacted about half, including a redlined base document, two drafts of the agreement and a version of the district and Stanford's joint public statement.
The Weekly has objected to the district's reasoning and is awaiting further response.
The board voted last week at Stanford's request to suspend any further action on the deal.
The county this week released its conditions of approval — the requirements that its planning staff has recommended to compensate for the impact of Stanford's expansion. In addition to providing funding for Palo Alto's Safe Routes to Schools program for bicycling improvements, it calls for the university to provide standard school-impact fees, which are funds paid to the district to mitigate for new students enrolled as a result of new development. Austin, on April 16, stated that those fees would total about $4.2 million, in contrast to the $138 million over 40 years that had been negotiated by the district.
Stanford's general-use permit application continues to move through the county's approval process with a series of Santa Clara County Planning Commission hearings starting next Thursday, May 30, in Palo Alto.