HomeMy WebLinkAbout01091974STANFORD UNIVERSITY
STANFORD, CALIFORNIA 94305
Area Cede A11 :21.2300
VICE FRES1DENT FOR EUSSNESS AND FINANCE
January 9, 1974
Mr. George Sipel
City Manager, City of Palo Alto
Civic Center
Palo Alto, California 94301 •
Dear George:
OfFICE ' s�
During recent ciionths, we have been reviewing the policies which govern
the use of Stanford 'University's 8100 -acre ;and endow —rent. We have
done so because there is a great need, both on and off the ca':pus, for a
current and clear delineation of the principles and policies which i,uide
the manage: ent of our lands .
This week the Land and fuildings Cov.ittee of the Board of Trusteez.
discussed two drafts —one a position tiY .er c ,1--t :i ncs of i.:... d
use pol is �n�! `? c �` :..� = z' Y� 1:. pc iei:'s . C ._:^:ittcc
has asked me to refer the documents to the University Land and Building
Development Committee (made up of faculty, students, and staff) for its
cc, .ments and advice prior to consideration and action by the Board at.
its March 12 meeting, and to release the materials to public officia L;;
and other interested groups. They will be matic public Thursday. t
Copies of the two drafts are enclosed for your information. If you would
like to discuss them with me, I will be happy to do so.
Sincerely ours,
Robert R. Augsburgcr
JAN 1 11974
SEM 19 CO:i,'1f.1.....—
Stanford Land Use —An Overview of Policy Determinants
At this time, when various governmental bodies are in the process of developing
long range comprehensive plans for their respective jurisdictions, it appears appropriate that the
Board of Trustees of Stanford University review and restate the principles and policies that govern
the use of the University's lands in Santa Clara and San Mateo Counties, consisting of
approximately 8,100 acres. This position paper is intended to provide the background for these
policy decisions.
Characteristics of Stanford University
Any determination of land use is dependent upon an understanding of the characteristics
and purposes of the institution. Stanford University is:
1. A residential university: The educational process, particularly at the undergraduate
level, is based upon a close interrelationship of classroorn, laboratory, library and residence teaching
facilities. From its inception, the physical plans for Stanford have contemplated that students and
faculty would, to the extent possible, live in close proximity to each other and to their teaching
and research facilities.
2. A research ins i, 'tion: The halln-:ark of a. Jistinguisht d university is she iilterao.i.ii
between teaching and research. The vitality of teaching depends on the advancement of knowledge
through original research, and scholarship is kept alive through the training of young and lively
minds. Furthzrinore, if research is to be more than a sterile exercise, those who engage in it require
the opportunity for close interaction with public and private sponsors and with users of research as
well.
3. A dynamic institution: Universities are by nature conservative institutions in the sense
that they are charged with conserving and teaching the hest of man's past learning. But they are
also by their nature engaged in change, both adjusting to the changing world around them and
providing the intellectual stimulus for the forces which will produce change_
4. A private institution: Stanford was founded and organized as a private trust, and its
on -going financial support and operations are derived primarily from private sources —tuition, gills,
and endowment. While Stanford receives public monies in return for specific services, its ability to
remain an independent, self -determining institution is dependent upon financial strength and
viability.
S. A permanent, perpetual institution: By virtue of its Founding Grant, its land
endowment, and its plant investment, Stanford is permanently committed to its present location.
Unlike other institutions or organizations, it cannot readily change its situs. Of equal importance, it
is likely to exist in perpetuity. A university's time horizons arc measured in centuries, not decades.
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6. A national and international resource: Stanford is looked upon to provide teaching,
research, and public service to meet needs which know no jurisdictional boundaries. While the
University exists in a particular place, derives important benefits from its location, and has
responsibilities to its neighbors, it is also subject to dernands and assumes responsibilities that are
national, indeed worldwide, in character.
Influences on Land Use Policy
Academic
The availability of an 5,100 acre "campus" places Stanford University in a unique
positron among American uni crsities. Of the major research institutions, only a few, including
Stanford, still offer some breathing space. Most take on the character o; dense urban developments
with precious, internal campus opn space gradually being consumed by necessary physical
expansion.
The physical character of Stanford sets it aside as a special kind of place —ail the result of
i g ne ous l_' d ndowi c f i' l 1- + [i in use ♦>., li<<i d f 1 -,nth . .. .1.. i and
� v i.. C'i "fit 3ilCt t:ors'„ 'ti r ir_,r'rl:�i� i / the nf ti��i i . ail" e.art a ��n'ti4.�i< %
other purpvscs t., thy institution.
As higher education has become more competitive both within the private sector and
with public systems, this special quality of Stanford has become a unique asset. Its preservation is
essential to the University's long -run health.
Both Frederick Law Olmsted and MIT President Francis A. Walker, who assisted Senator
and Mrs. Stanford in developing the original campus plan, envisioned a residential community of
scholars, with students in snail living groups located in close proximity to faculty and academic
facilities. That original concept still prevails, in principle, because the availability of land has
permitted it to be retained in spite of the dramatic changes and growth which have taken place
within the institution. The community which exists, imperfect though it may be, still helps to
minimize the impersonal elements of .a large institution, and provides an environment which permits
and encourages a high degree of interaction between faculty and students in a variety of situations.
This is a critical element in the educational process and one which must be retained in an
increasingly impersonal society. While the present student and faculty residence system approaches
adequacy for the size of institution now envisioned, future generations of educators may find it
desirable to expand the size of the student body and/or faculty. in planning the use of Stanford
lands, it is imperative that these future generations be provided with the flexibility which exists
today so that the personal character of the educational process may be retained. Concurrently,
adequate areas must he preserved to provide for organized and independent recreational
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opportunities for faculty, staff, and students who reside here.
Since World War Ii Stanford has emerged as a major research institution --a fact which res
not only changed its character but has generated great demands for a variety of facilities. Its ability
to respond to those demands was a key element undergirding its research eminence in science,
engineering, and medicine.
One need consider only a few changes which have taken place over the short span of 15
years —the Medical Center, the linear accelerator, astrophysics, the biological preserve —to appreciate
how difficult it is to predict the needs and demands of future generation: and how important is the
capacity to respond to them. Clearly the availability of land \sill have a strong influence on the
future of Stanford, both as a teaching and as a research institution, and it is imperative that
multiple options be retained. While other institutions are being forced to purchase adjacent
properties (at high prices and often at the expcnie of community goodwill) or to locate activities at
sites remote from students and other faculty, Stanford has the ability to change and grow at its
home campus.
Simiiaiiy, the use uI so i:e 111; iiiOri !antis to !tense private, high tec hookg/
companies, independent research institutes, and other educationally related enterprises has
important academic overtones. The ability of scholars to exchange knowledge and to transfer
rr carch from campus laboratories to commercial applications provides a variety of benefits to
faculty, to graduate students, and to the greater society. On the other hand, the use of presently
undeveloped lands by organizations or for purposes which do not have a strong bond with the
research and teaching functions is deemed contrary to the long-term interests of the University and
the larger society it serves.
Finonclol Considerations
In the 1950s Stanford began to develop a limited portion of its lands for interim
income -producing purposes. In addition to the direct and indirect academic benefits there were and
still are important financial reasons for this: 1) the increasing burden of property taxes on
undeveloped lands and 2) the s;ew that the land represents a financial resource imposing a fiduciary
obligation to obtain economic returns on those portions not currently used for academic functions.
The first pressure is quite real. Property held by a tax-exempt institution but not used
for tax-exempt purposes is still subject to property tax. Furthermore, tax appraisals arc based upon
the highest and best use rather than on the current income -producing value of the property. As the
areas surrounding Stanford land, particularly those in Palo Alto and Menlo Park, have been more
intensely developed, appraisals and resulting lax liabilities have increased substantially. Development
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of adjoining University properties has eliminated the negative flow of general funds for property
taxes while at the same time providing incremental income to the University.
Efforts have been made to find agricultural uses which would cover the carrying costs of
the property and reduce the pressures for development. However, income from those sources has
not proven to be an adequate offset for rising taxes. Similarly, efforts made within the State
Legislature for changes in the Land Conservation Act to permit automatic withdrawal from
contractual open -space restrictions for academic uses base been unsuccessful. Recent explorations
with governmental officials have indicated that certain forms of open space or scenic easement
contracts might be devised which sso,!!d permit cancellation when the lane is required for academic
purposes. Under such contracts, tax appraisals would be based upon the actual flconie produced by
perrnittcd uses rather than the highest and best use for the lard. To the extent chat long-term
academic flexibility can be retained at a minimal cost to general funds, this approach would
eliminate one of the principal financial pressures for development.
The second pressure for development is more complex. If the lands are viewed merely as
a financial ends:,,vn ent—a financial resource —the Trustees have a fiduciary oh'si_ation to obtain a
reasonable economic return from them to support the educational enterprise. However, if they art
viewed as an academic endowment or academic resource, similar to a building, then the Trustees'
obligation is to preserve and protect the property for present and future academic use.
In practice, both points of view have been accommodated to date. The use of maximum
terra land leases, initially of 99 years' and more recently of 51 years' afurrtion, has permitted
ultimate control over the land for academic purposes while providing interim income -producing
capability. While development has produced incremental endowment income, experience has proven
that it carries with it many tangible and intangible costs to the University. The need to provide
supportive community facilities and services can result in either additional out-of-pocket costs or
loss of additional land.
When the land development program was conceived in the early 1950s, Stanford was a
regional university, seeking to build itself into a major academic institution. Its financial resources
were limitcd—an endowment of $40,000,000, with an annual operating budget of $7,000,000.
Relative to its then needs, the land endowment was appropriately viewed as a significant
financial asset, Twenty years later, the relative significance of the land as a financial asset has
diminished greatly. Stanford has been successful in achieving a position of worldwide distinction,
deserving of support on its academic merits. The amount of money represented by the proceeds from
prepaid leases on unincorporated lands not currently included in the academic reserve (assuming
they Could physically be fully developed al once) would be equivalent to a 10 percent increase in
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the endowment, and the investment return on that amount would provide an incremental flow of
funds equal to a 10 percent increase in the tuition rate. However, land represents an irreplaceable
resource. Once consumed, it is essentially irretrievable without incurring substantial political and
economic costs.
While it is appropriate to use a portion of Stanford lands for non -University organizations
and functions which clearly support, relate to, and reinforce the teaching and research mission of
the University, such uses should be determined primarily, by academic factors in addition to
financial considerations. Further intensive development of Stanford lands for purposes inconsistent
with the above and solely as a source of funds should be undertaken only as a last resort, when all
other financial resources have been exhausted and the survival of the institution is at stake.
Political Considerations
One of the greatest difficulties facing the University has been that of protecting its land
from encroachment by surrounding public entities. Residents of surrounding communities,
individually, and collectively, have looked to Stanford land :as a resource for meeting their own
prticular needs. As the pendulum swings, those needs vary from employment, tax base, housing,
community facilities, permanent open space, roads and highways, parks and recredtiunai facilities,
to utility easements. With the surrounding ;areas reaching urban densities and most of the vacant
land already consumed, the "Island of open space" which Stanford represents will become an even
more tempting target for community consumption. This prospect is compounded by the very severe
zoning restrictions being used by these communities to restrict their own growth.
The risk of condemnation is real and continuing. Some 665 acres have already been
condemned for public purposes, many for a freeway system whose route traversing the center of
Stanford lands was neither sought nor wanted by the University.
The University, as an institution, is permanently committed to its present location. It
must retain the right responsibly to use its land endowment in the furtherance of its academic
mission, subject only to reasonable restraints which may be imposed by political iuurisdictions. When
public bodies contemp', :tc taking University land or limiting its uses, it is submitted that they have
a serious obligation to consider in their deliberations the social consequences of restricting the
University's ability to perform its essential missions, now and in the future.
Some of the negative reactions of surrounding communities in recent years are clearly
attributable to the perception that Stanford's presence and its land development policies have
Induced growth in the region and contributed to alleged deterioration of the residential quality of
the arca. At a time when anti -development attitudes are strong, the absence of any cle riy defined
policy from Stanford contributes to the fears and suspicions of its neighbors.
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_PD M 71-13
The use of undeveloped Stanford land for high density manufacturing or high -density
e.m aloyment centers is deemed inappropriate and not in the test interests of the University, except
where such use has already been made of certain campus-lands:Skit activities -adversely affect the
local employment market and place pressures on the University to participate in community
services to accommodate the influx of additional employment. Conversely, the use of Stanford
lands by private research and development organizations whose employment is of low density and
predominantly professional in character offers few of these problems to the University and the
surrounding communities. More importantly, a land use policy which limits eligibility for location
on Stanford lands to those organizations whose presence would enhance the academic functions of
the University represents a rational extension of the concept that the land endowment is for
academic purposes.
For similar reasons, any significant use of Stanford lards for non university related
housing seems inappropriate. Single-family, condominium, cooperative, and, to a lesser extent,
rental housing units present definite problems from the point of view of recapture because of the
multitude of ownership and possession interests, and must, in effect, represent a permanent
commitment of the land to housing purposes.
Unlike Most other educational institutions which must obtain municipal services from
their local communities even though they do not contribute to the local tax base, Stanford
provides these services for itself. Fire and police protection, internal road construction and
maintenance, utilities and sewage systems and other municipal -type service; are funded through the
operating budget, and the University places very few financial or service demands on the counties
in which its unincorporated lands are located or the cities adjacent to them. Furthermore, the
interim use of Stanford lands by non -tax-exempt entities has contributed significantly to the
revenues of local political jurisdictions, particularly in Santa Clara County. Efforts to develop
Stanford lands for incremental tax revenues are not justified and should be resisted.
Conclusions
The Board of Trustees and University officers have a right and a duty to preserve and
protect Stanford's land endowment for the use of present and future generations of students and
faculty.
While financial and political influences on land use policy need to be taken into account,
the dominant and prevailing consideration must be the appropriateness of those policies in the
furtherance of the academic mission of the University. Board policies, as adopted from time to
time, should be designed to encourage land uses consistent with the institutional characteristics and
purposes of Stanford and to discourage those uses or claims which do not relate to or support the
mainstream of the University.
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PROPOSED LAND USE POLICIES
The following policies are to be followed by University officers as a guide in determining
the future use of Stanford !ands:
1. The purpose of the Stanford land endowment is to provide adequate land, on a
continually renewing basis, for facilities and space for the instructional and research activities of the
University.
2. The use of lands shall be planned in a manner consistent with the characteristics of
Stanford as a res°dential teaching and research university, and shall provide flexibility for
unanticipated charges in academic needs.
3. Us,.!s of Stanford sands shall cor.t.inue to produce a community of which all those who
have the pelf re of the University at heart can be proud and shall serve in an important way as a
model in the field of academic planning and development. Cooperation with adjoining communities
is important, and the concerns of neighboring jurisdictions shall be considered in the planning
fsrOCtSS.
4. All planning within the campus boundaries shall continue to respect hill tops and
ridges of such height and conformation as to form "skylines" so that insofar as possible they shall
be preserved free from the erection of structures.
5. Land conservation contracts with governmental agencies to reduce the University's
property tax costs shall be encouraged provided they permit academic uses or provide for
cancellation or recapture in the event such land is required for academic purposes,
6. In order to preserve its land endowment for the promotion of important public
interests in its trust, the University shall vigorously oppose efforts by public agencies to condemn
its lands.
7. Leases or other rights for interim use of Stanford land by public or private
organizations or individuals, other than the University and i!.s ontities, shall be subject to the
following guidelines.
a. The term of leases on Stanford lands shall not exceed 51 years
except for those unusual cases in which a longer lease would be of great value to the
University.
b. All future leases, licenses, easements, etc., shall provide for recapture
by the University as follows:
B [LAD -JET
1) The right of first
refusal to reacquire such rights on each and every occasion that said rights
are transferred by the owner. lessee, or benef'ciary.
2) Wherever feas,ble, the right to reacquire such rights at
the most aurantageous price to the trntversrty s%hen, in the sole
determ'n>t+on of the Board of Trustees, such eights are required for academic
use.
c. The Un,vers_ty shall :eserse the r,ght to prohibit any material
change ir: the use of e le,3si'+ho'd or othe' poperiy .Merest.
d. Adirir tratr'C, professional, •fse3rch, Or rl;t3JStrral uses shall
emphas;ze those funct-efts iid 3CiA•t:es lkh,ch a'e 'elated to and enhance the academic
purposes of the Ur:tic:. ty FmF loyment by such or aniz3t•ons on Stanford land shall
be p cdom n3nrl.t p'o(c s'Or-i ani of !O'.. den,,'' J
e. Housing use• shall totiihavi ill: i'7r'Jcritia iharactci of iii,
University's educat•onal program; shall proti'i.ie for elrgrb•trty requirements; shall give
priority of occupancy to students. faculty. and start, and, whenever feasible, shall be
located and des: red ,n such a mannc; to perm,t we for student an;i/or faculty/staff
hour ng if recaptured by the L. n.versrty
f. Comme's•al, resat, or ser e !r•s s shall he limited to those areas
already deer►aped for such purposes or to such locations as may be required to serve
the needs of the University and its residents -
g. Agr culturai 0: 'ecreat+onal uses shaft be planned in such a manner
as to minimize the cost of improvements for <ihrch the university is -obligated to
compensate upon rccaptuic -