Behind frenemy lines

June 25th, 2010

With city review in progress, obstacles still remain to approval of $3 billion development

By Gennady Sheyner — Palo Alto Weekly,

Architect Edward Durell Stone was a worldwide celebrity when he accepted a commission in 1956 to design the new and ambitious Palo Alto-Stanford Hospital and Medical Center.

But as he embarked on the assignment, Stone found even his clout couldn’t ease the clashing priorities, tense negotiations and healthy dose of populist rhetoric that characterized discussions about the joint city and university project. The Palo Alto Times observed in a retrospective article that “there must have been times in the next two years when Stone, one of the country’s best-known architects, wished he had never heard of Stanford and Palo Alto.

“As soon as design was underway, a series of complicated feuds developed between Stanford and the city, Stanford and local doctors, ‘contract doctors’ who supplied specialized service to the hospital and the city, and between individual Stanford doctors and individual Palo Alto doctors in the same specialties,” the article stated. “All this ill feeling periodically erupted into the open, both at city council meetings and at staff meetings of Stanford men.”

Stone’s frustration probably seems familiar to those who’ve followed Stanford’s crawl on the bumpy path to city approval of the university’s latest hospital-redevelopment plan. The $3 billion “Renewal Project” entails as its two main components expansions of Stanford Hospital and Clinics and the Lucile Packard Children’s Hospital. In early 2009, tempers flared when the City Council and various Palo Alto commissions debated the types of amenities Stanford should be asked to provide in exchange for the negative consequences of building what is repeatedly referred to as “the largest project in Palo Alto’s history.”

Former Vice Mayor Jack Morton accused Stanford of “playing dirty” in its stance that, because improved local health care would benefit the community, the city could exempt the project from various development requirements. He compared the university to a “medieval Duchy” in a pamphlet he wrote in his final months on the council.

Planning commissioners argued that the added traffic from the Stanford project would overwhelm Palo Alto’s already crowded roads, and Councilwoman Yoriko Kishimoto called for a policy that would guarantee no additional traffic as a result of the hospitals’ expansions. Then-Mayor Peter Drekmeier said the university should build at least some housing for the hospitals’ 2,242 new employees.

Stanford responded by scrapping its concurrent plan to expand the Stanford Shopping Center and build a hotel, a project component that Palo Alto officials had hoped would bolster the city’s dwindling revenues. In a letter explaining the withdrawal of the mall expansion, Stanford stated that the shopping-center project distracted the community and the council from the critical priority of rebuilding the hospitals, which under state law have to be seismically retrofitted by 2013.

But now, with the deadline looming and the first round of concerns aired, the most serious bickering appears to have abated and the two sides say they are closer to moving forward on the expansion proposal. That can be attributed in part to turnover on the council, which swore in four new members in January, and to an initial show of community support.

Mayor Pat Burt also set the tone for improved relations in March in his State of the City speech, in which he expressed “hope that we are moving toward a period of a stronger and mutually beneficial relationship between Stanford and Palo Alto.” He said he would like the city to reach a decision on the application this year. He spoke of the city’s “shared vision” with Stanford and praised the hospital plans for their “innovative and sustainable design.”

Last month, the approval process hit a major milestone when the city released the highly anticipated and much delayed Draft Environmental Impact Report, which analyzes the project’s impacts on everything from housing and traffic to climate change and the nesting habits of the Cooper hawk.

The nearly 6-pound document has launched a fresh wave of public hearings and negotiations between Palo Alto and Stanford. The council and the Planning and Transportation Commission are now in the midst of chapter-by-chapter reviews of the impact report — a process that entails 11 public hearings.

Concurrently, city officials are negotiating with Stanford on a development agreement, a contract that would allow Stanford to exceed the city’s regulations in exchange for public benefits, which may or may not relate to impacts of the project’s construction.

Deputy City Manager Steve Emslie spoke in glowing terms at the May 24 council meeting about the pending development-agreement negotiations. The city has “really turned the corner in having entered into a much more collaborative process with Stanford,” Emslie said. Talks are “moving in the right direction.”

The 1.3 million square feet of new medical-center development, in some way or another, touches on each of the council’s 2010 priorities for Palo Alto — economic/financial health; environmental sustainability; emergency preparedness; land-use and transportation planning; and collaboration for youth well-being.

Because of that, city officials still fret about the potential traffic, visual and noise impacts of the project (see sidebar). But the council’s initial laundry list of possible benefits has shrunk. Stanford, for its part, has offered its own concessions, recently agreeing to modify its proposal to protect more trees and to build bike connections and pedestrian paths between the hospitals and the downtown transit center — elements that make the giant package easier for Palo Alto to swallow.

Jean McCown, former Palo Alto mayor who now serves as assistant vice president at Stanford University, told the Weekly that she also feels the two sides are now on a better path. McCown said she was concerned about what she called the city’s “open-ended approach” last year. She recalled a list of about 100 items that the city compiled to prepare for its negotiations on the development agreement. Aside from the usual development fees, the list included hundreds of housing units, a new police station, a water-detention basin for the San Francisquito Creek and dozens of other benefits that bore little or no relation to the hospital.

“The council kind of opened up the floodgates and said, ‘Let’s just throw anything on that list,'” McCown said. “It had just about anything they could throw in there.

“I thought this was an unprincipled way to approach this.”

The list has narrowed considerably since, though it still includes some items of dispute, including the police building. The council is now taking a more “constructive approach,” she said.

“I feel like we’re on a much better track now,” McCown said.

Former Palo Alto Mayor Bern Beecham, who is now a leading advocate of the Stanford expansion, attributed the change to the new council. He said he believes the previous council’s “arrogance” and “irrational demands” prompted Stanford to abandon the shopping-center component of the project, a component that he, as a councilman, helped convince Stanford to add to the application.

The new council members — Karen Holman, Gail Price, Greg Scharff and Nancy Shepherd — aren’t exactly cheerleaders for the project, but their focus thus far has been on the details of the Draft Environmental Impact Report, not on sweeping goals like “net-zero car trips” or the philosophical differences between Stanford and Palo Alto.

Beecham called the new council “more pragmatic and more realistic” so far when it comes to the hospital expansion.

Even with the governance changes, the project still faces considerable obstacles. Under Stanford’s proposal, the main hospital building would be 130 feet tall, far exceeding the city’s 50-foot height limit. It also poses a direct challenge to Palo Alto’s Comprehensive Plan, a central land-use document that has set a cap of 3.26 million square feet for nonresidential development.

The impact report proposes the city amend its Comprehensive Plan to create a “hospital zone” specifically for this project — a proposal that worried planning commissioners Susan Fineberg and Arthur Keller. Earlier this month, Fineberg said the city needs to explore all the unintended consequences of the proposed zone, including other projects and other parts of the city where the new designation could potentially pop up in the future.

Other residents expressed reservations or outrage about the hospital expansion. Michael Griffin, a former planning commissioner, said he was concerned about traffic and argued that the new environmental report doesn’t analyze the impact sufficiently.

Councilman Greg Schmid, likewise, has derided the models used in the impact study to measure traffic and housing impacts as “faulty and biased” and advocated for some kind of a guarantee that the project won’t create new costs for the city.

Land-use watchdog Bob Moss has repeatedly blasted the proposed height of the new hospital and urged the council to demand shorter buildings.

At the June 2 planning commission hearing, Moss claimed that the hospital’s 130-foot height would make it difficult for firefighters combating blazes at the facility. He argued that if other hospitals can build facilities shorter than 100 feet tall, Stanford should be able to do it, too.

The height and mass of the project could create procedural hurdles for Stanford, particularly as development-agreement negotiations unfold. Palo Alto is almost certain to demand more benefits from Stanford in the agreement, some of which may not relate specifically to the hospital’s impact. Councilwoman Holman, for example, said recently that she wants Stanford to agree to the water-detention pond that would improve flood control around San Francisquito Creek.

But for every criticism about the Renewal Project — or suggestion that’s made about how the university could take steps to equalize the impacts on and benefits to Palo Alto — there seems to be a city official offering a moderating view. At the June 14 council meeting, Burt downplayed the impact of the hospital’s proposed height, noting that the new buildings wouldn’t be located in the city’s “core development areas.” Councilman Yiaway Yeh, meanwhile, said Stanford’s status as a world-class medical institution would influence his thinking on whether to approve the new hospital zone.

“Stanford has always been seen as a leader in the health field, even within the context of other hospitals going through their rebuilding,” Yeh said. “The position of Stanford as one of the pre-eminent academic hospitals is something that factors into my decision process and the request for a new zone.”

This is the first article in a four-part Palo Alto Weekly cover story. To download the complete cover story, please click here.