HomeMy WebLinkAboutStaff Report 222-08City of Palo Alto
City Manager’s Report
TO:HONORABLE CITY COUNCIL
FROM:CITY MANAGER DEPARTMENT:
DATE:MAY 5, 2008 CMR: 222:08
SUBJECT:BACKGROUND REPORT ON CURRENT STATUS OF
CUBBERLEY COMMUNITY CENTER AND THE PROPOSED
FOOTHILL EDUCATION CENTER.
This is an informational report and no Council action is required.
BACKGROUND
On November !, 1981, the City and Palo Alto Unified School District (PAUSD) entered
into a lease/purchase agreement for the former 19.56-acre Terman Middle School site.
During the term of the lease purchase, the City subdivided the site into three separate
sections: 4.35 acres was used for a low income housing project; 7.93 acres for the Jewish
Community Center (JCC); and the remaining 7.28 acres was dedicated as park land in
1985.
On September !, 1989, the City and the PAUSD entered into a 15-year Lease and
Covenant Not to Develop (Lease & Covenant) with the Palo Alto Unified School District
(PAUSD). Under the Lease & Covenant, the City provided PAUSD with annual revenue
in exchange for the City receiving: 1) a lease on the former 35-acre Cubberley High
School site, including 180,000 square feet in improvements to be used for community
theater, sport and art groups; 2) a Covenant Not to Develop five neighborhood
elementary school sites (Jordan, Jane Lathrop Stanford, Ohlone, Garland and Greendell);
and 3) an agreement that PAUSD provide space for extended day care at each of eleven
remaining elementary school sites.
On April 18, 1991, Council approved the Cubberley Master Plan to be used as a planning
document for guiding use and remodeling of the former Cubberley High School for
community center purposes over the life of the lease & covenant. The Master Plan
organized the Cubberley site into "neighborhoods" for the various user groups which
include the City, Foothill College, child care providers, visual artists, dancers and
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nonprofit community groups. It also included an implementation plan for necessary
physical changes to be made to the site and a vision for future construction Of new
facilities.
In July 1998, the Lease & Covenant was amended to provide for the reopening of one of
the covenanted sites (the Hoover School) and the substitution of two operating sites,
Walter Hays and Juana Briones, for the covenanted site to be reopened. The amendment
also provided for the addition of a twelfth extended day care site to be opened at the
Hoover School. On December !5, 2003, Council approved a 10-year extension to the
Covenant until December 31, 2014.
In 1999, just prior to the City’s completion of the purchase of the Terman site, PAUSD
notified the City of its intent to reopen Terman Middle School. On September 10, 2001,
the Council approved a Four-Party Memorandum of Understanding (MOU) between the
City, PAUSD, the JCC and Stanford University to resolve the challenging issues resulting
from PAUSD’s need for a third middle school. One of the five inter-related transactions
included in the memorandum was the City/PAUSD land swap, which transferred the
Terman Community Center portion of the site to PAUSD without creating a financial
hardship to either party. Another transaction ~vas providing the JCC interim space and
facilities during the time it would take the JCC to raise capital funds for and then design
and construct a new community center.
On December 10, 2001, the City Council approved the Terman-Cubberley property
exchange agreement with PAUSD. The property exchange agreement provided for the
City to swap 7.97 acres of City-owned property at Terman to PAUSD for 7.97 acres of
PAUSD-owned property at Cubberley. Its provisions also included the following: 1) a
reduction of the City’s lease payments to PAUSD by an amount equivalent to the City’s
lost revenues from its lease of the Terman site to the Jewish Community Center ($23,490
per month); 2)joint use of the Terman site fields and special facilities; and 3) reopening
of the covenanted Garland School site and the substitution of the Addison and E1
Carmelo school sites within the Covenant Not to Develop.
The City’s lease payment to the Palo Alto Unified School District in 1989 was
established at $2,700,000 with yearly increases to be determined by an average of the
Consumer Price Index. In 2007, the City’s lease payment to the Palo Alto Unified
School District was $4,136,317.
Since PAUSD took over the Terman site in the fall of 2003, the JCC has been subleasing
interim space at Cubberley and the adjacent Greendell School for its programs. It is now
in the process of constructing its new community center on an 8.5-acre site located at
Charleston and San Antonio Road in Palo Alto.
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Currently, Foothill College is the major tenant at Cubberley on a year-to-year lease for
40,000 square feet of space which generates approximately $800,000 per year in revenue
for the City. Foothill has proposed to construct a two-story 98,000 square foot state-of-
the-art Education Center on the City’s 7.97 acres at Cubberley. The proposed Educational
Center would include some joint-use facilities (e.g., meeting rooms, art space, child
development area, dance studio). Curriculum would be focused on college skill, career
pathways, and life-long learning.
On January 22, 2008 and February 19, 2008, Council held a study session to discuss the
Foothill College proposal and to provide staff with direction regarding property
negotiations with Foothill/DeAnza Community College District regarding its proposal.
DISCUSSION
In response to Council’s direction at its February 19, 2008 study session, staff has
contracted for an appraisal of the City-owned portion of the Cubberley site for purposes
of negotiating a lease with Foothill College. The appraisal will include both market value
(highest and best use) and a value based on public education use of the site. Negotiations
will reflect the interests of both Foothill College and the City. Foothill’s interests include
a lease structure that permits Foothill to use capital funds for lease payments; City
interests include replacing dilapidated buildings, preserving community fields, generating
additional revenue for other City facilities, reducing City maintenance, operation and
capital expenses at Cubberley and no requirement for major investment by the City.
Issues to be addressed in the negotiations include maintaining community uses including
a transition plan for the current long-term tenants. The proposed Foothill Educational
Center includes some joint use facilities for community use. Also, the JCC has offered to
the City the use of its gym and a classroom at its new facility at times when the space is
not being used by the JCC. While this space can be programmed for community uses, it
would not meet the needs of the long-term tenants at Cubberley.
In addition, the City has contracted with Group 4 Architecture, Research + Planning, Inc.
to analyze:
the current Foothill proposal with the possible elimination of 39,000 square feet of
building space,
the 20,000 square feet of building space that may be vacated by Foothill
Community College,
the possible community uses that may be integrated into the new Foothill
Educational Center
the possible transition of existing tenants and/or types of uses occupied by tenants
into Foothill’s vacated space and/or other possible spaces at or around the
Cubberley facility
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Group 4’s transition plan will include space allocation, parking analysis and site options
for existing buildings. The target date for the completion of transition plan is late June.
RESOURCE IMPACT
It is anticipated that the proposed lease with Foothill will support City interests including
replacing dilapidated buildings, preserving community fields, generating additional
revenue for the City, reducing City maintenance, operation and capital expenses at
Cubberley and will involve no requirement for major investment by the City.
POLICY IMPLICATIONS
The lease will implement Council direction concerning Foothill’s proposed Education
Center and Comprehensive Plan goals and policies including working with nonprofits to
promote adequate schools and community services.
ENVIRONMENTAL REVIEW
Once Foothill develops a specific design for the proposed Education Center, the City
approval process with include conducting an environmental review and developing a
mitigation program for any impacts, as required under the California Environmental
Quality Act (CEQA).
PREPARED BY:
APPROVED BY:
I~atl~y.. EspinozatHow~rd (~ --
Division Managel’, Cubberley Community Center &
Human Services Division
Richard James
Director of Co Services
CITY MANAGER APPROVAL:
Steve Emslie/Kelly Morariu
Deputy City Managers
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