HomeMy WebLinkAboutStaff Report 464-08City
City of Palo Alto
Manager’s Report
TO:
FROM:
HONORABLE CITY COUNCIL
CITY MANAGER . DEPARTMENT: PLANNING AND
COMMUNITY ENVIRONMENT
DATE:
REPORT TYPE:
SUBJECT:
DECEMBER 8, 2008 CMR: 464:08
STUDY SESSION
Continued Discussion on Review of Housing Needs Analysis for the
Stanford University Medical Center and Stanford Shopping Center.
Projects
RECOMMENDATION
The purpose of the study session is to allow for Council comment regarding the City’g approach
to housing issues as the projects move forward
BACKGROUND
The City Council held a study session on November 10, 2008 to 1) allow for City Council review
of the Housing Needs Analysis prepared by Keyser Marston Associates, Inc. (KMA) related to
the Stanford University Medical Center (SUMC) Replacement and Renewal Project and the
Simon Properties - Stanford Shopping Center (SSC) Expansion Project, and 2) allow for Council
comment regarding the City’s approach to housing issues as the projects move forward. A copy
0fthe City Manager’s Report for the study session is contained in Attachment B.
At the November 10, 2008 study session, Staff provided the status on the review of the Stanford
Projects, including the status of the Environmental Impact Report (EIR) the fiscal analysis, hotel
study and Development Agreement preparation. Staff stated that housing was not specifically
included in the Projects proposed by the applicants, though the Development Agreements will
likely contain a housing component. The EIR would contain an analysis of the housing impacts
generated by the Projects and the Village Concept alternative in the EIR would contain housing
in order to reduce automobile trips. The City’s employment and housing sub consultant, Keyser
Marston Associates (KMA), informed the Council of the possible employment generation and
housing impacts from the Projects. KMA described the various rates of worker households that
could be housed within Palo Alto.
CMR: 464:08 Page 1 of 4
The Council had questions regarding Stanford’s General Use Permit housing requirements and
the relationships between the project’s housing projections and the ABAG projections and other
technical aspects of the report. The Council heard from members of the public regarding housing
related issues. Due to time constraints, the City Council continued the discussion to December 8,
2008.
DISCUSSION
Stanford University Medical Center- Potential Housing Sites and Approaches
The City and the applicants plan to determine through the Development Agreement how much
housing to require in conjunction with the developments, as well as the affordability of such
housing. In addition, the Development Agreement will need to outline whether housing needs are
addressed through fees, dedication of sites for housing, construction of housing, or some
combination of those. Based on Council input to date, these discussions will focus on affordable
housing because while the market is able to supply market rate housing, there is currently a
shortage of affordable housing serving the City, particularly rental housing. In addition, housing
discussions will focus on identifying housing sites as close to the project area as possible in order
to reduce the vehicle miles traveled associated with the projects.
Housing needs for most commercial projects are addressed through payment of housing impact-
fees. As described below, the Shopping Center project is subject to the existing housing impact
fee ordinance and it will be required to pay fees. The Medical Center is currently not subject to
impact fees under the existing ordinance and both the City and applicants have agreed to address
the housing needs for this project through the entitlement process. There are several ways to
address the project related housing demand, including expansion of the fee program to include
the Medical Center, adoption of inclusionary housing regulations for hospital zones or inclusion
of a housing agreement in the Development Agreement. Given the proximity of the project to
transit sites, the availability of Stanford controlled land in the vicinity of the project and the City
and applicants’ mutual desire to reduce project generated traffic, staff is currently focusing on
incorporating housing solutions into the Development Agreement.
Components of the housing approach may include, but are not limited to, 1) the number of units
to require, 2) the relative affordability levels and 3) the preferences for housing sites.
Stanford Shopping Center: Housing Impact Fees
As indicated above, the Stanford Shopping Center project is subject to the existing housing
impact fee ordinance and it will be required to pay fees. The housing impact fee is calculated
based upon the net new square feet added to the site. The housing fee to be paid by the shopping
center project sponsors would be approximately $6.1 million, based upon the 2008 housing fee
rate.
In addition to payment of the housing impact fee, the expansion project will generate increased
revenues from sales taxes, property taxes and Transient Occupancy Taxes (TOT). Based on
estimates of projected taxable sales by CBRE Consulting, the firm under contract with Stanford
University and Simon Property Group to conduct a fiscal analysis, the shopping center expansion
is projected to produce a $1.6 million increase in annual sales tax. The expansion is also
projected to produce an increase of $0.7 million in property taxes annually. The proposed
CMR: 464:08 Page 2 of 4
construction of a new 120-room boutique hotel as part of the proposed Shopping Center
expansion would generate $1.1 million annually in TOT as well as taxable sales from its
restaurant and catering facility..This additional revenue of approximately $3.4 million would
partially offset subsidies to fund affordable housing programs and projects within the City.
Workforce Housing Program
Workforce housing preference programs are becoming important tools in decreasing vehicle
miles traveled and reducing gasoline consumption by encouraging workers to walk and bike to
work. In addition, worker preference programs reduce jobs/housing imbalance and create
walkable urban villages. These preference programs must be structured in a way to ensure full
compliance with the federal Fair Housing Act and the California Fair Employment & Housing
Act which prohibit property owners from refusing to rent a dwelling unit to any person because
of their membership in a protected category, such as race, religion, disability, gender and marital
status. Thus any effective workforce preference program must also have an active outreach and
marketing program to employees of all protected classes.
PLANNING AND TRANSPORTATION COMMISSION REVIEW
On October 1, 2008, the Commission held a study session on the Housing Needs Analysis
prepared by KMA. Attachment A contains a summary of individual Commissioner’s comments,
provided by Chair Daniel Garber to the Council on November 10, 2008.
NEXT STEPS
Review of the Projects will continue as described in the November 10, 2008 CMR. The Draft
EIR is tentatively expected to be released in early 2009. The hotel and fiscal analysis will also be
provided to the Commission and Council in early 2009. Preliminary reviews and study sessions
for the SUMC and SSC projects will continue at the Architectural Review Board through early
2009. A study session to review the traffic report associated with the project will be scheduled
with the Commission in late January and with the Council in early February.
PREPARED BY:
DEPARTMENT HEAD:
CITY MANAGER APPROVAL:
STEVEN TURNER
Senior Planner
CURTIS WILLIAMS
Interim Director of Planning and Community
Environment
CMR: 464:08 Page 3 of 4
ATTACHMENTS
Attachment A: Summary of Planning and Transportation Commission’s comments, provided
by Chair Daniel Garber to the City Council on November 10, 2008
Attachment B:CMR 441:08 dated November 10, 2008, Study Session to Review Housing
Needs Analysis for the Stanford University Medical Center and Stanford
Shopping Center Projects
COURTESY COPIES
Cara Silver, Senior Assistant City Attorney
Rick Jarvis, Special Counsel
F. Gale Con_nor, Special Counsel
William T. Phillips, Sr. Assoc. Vice President Stanford University - Land, Buildings & Real
Estate
Jean McGown, Director of Comm. Rel. Office of Government and Community Relations
Charles Carter, Director Land Use and Environmental Planning Stanford University
Catherine Palter, Asst. Director Land Use and Environmental Planning Stanford University
Mark Tortofich, Director of Design and Building Stanford Hospitals 8: Clinics / Lucile Packard
Children’s Hospital
Barbara Schussman, Bingham McCutchen
Art Spellmeyer, Simon Property Group
John Benvenuto, Simon Property Group
Anna Shimko, Cassidy Shimko, Dawson, Kawakami
Trixie Martelino, PBS&J
Whitney McNair, Metropolitan Planning Group
CMR: 464:08 Page 4 of 4
Attachment A
Planning And Transportation Commission Comments
Meeting of October 1, 2008
Summary
These comments are not part of a motion - no motion was made. These comments are a summary
of the Commission’s discussion in their study session discussing Stanford’s Housing Impacts.
The following is a transcript fi’om the P&TC Chair Dan Garber’s presentation to Council.
"Six Points:
"The Commission recognized that with the exception of the hospital facilities which the Council ultimately
excluded from housing mitigations, that these exclusions didn’t relieve Stanford from mitigating their’s
projects other impacts including parking, and that even excluding the hospital facilities there was still a
significant number of facilities that were part of the medical center that did have significant impacts and
would have housing impacts related to them that should be mitigated.
"Number Two. We recognized that the City would have difficulty in compelling Stanford to address
mitigations outside of Palo Alto. But Palo Alto should try and include as many of those mitigations in their
agreement with Stanford as possible and that the EIR as well as the Development Agreement is probably
the best places for those understandings to be recorded.
"Number Three. The commission recognized that the development agreement is the best tool to articulate
the mitigations Stanford will provide and that the phasing of the various mitigations especially the housing
ones should be included in that document.
"Four. That the CEQA section on Green House Gas Generation should be employed to in part, to
evaluate the extent of the housing mitigation needed. In a related qomment, the commission strongly
supports the Village Concept because of its ability to reduce trips and carbon foot print by associating
closely housing with places of work as well as other amenities of the community.
"Number Five. Housing mitigation should be made based on Stanford’s impacts rather than trying to
satisfy ABAG requirements - which is not to say that those things are not related. But there is a
responsibility to the project first and then seeing how those impacts support or contribute to our ABAG
contributions is a secondary topic.
"Number six that the red cross site which is the only site identified in the staff report as being within Palo
Alto, is not a good choice for housing in Palo Alto. And that site should be functioning in a variety of other
ways than explicitly housing. As one Commissioners put it is a "character defining site" and should have a
boarder scope than simply having housing on it.
ATTACHMENT B
City of Palo Alto
City Manager’s Report
TO:
FROM:
HONORABLE CITY COUNCIL
CITY MANAGER DEPARTMENT: PLANNING AND
COMMUNITY ENVIRONMENT
DATE:
REPORT TYPE:
SUBJECT:
NOVEMBER 10, 2008 CMR: 441:08
STUDY SESSION
Study Session to Review Housing Needs Analysis for the Stanford
University Medical Center and Stanford Shopping Center Projects -
EXECUTIVE SUMMARY
The City contracted with Keyser Marston Associates Inc. (KMA) to conduct a housing needs
analysis for the SUMC and SSC proposed expansions. The purpose of the analysis was to
determine the number of new housing units required to accommodate the housing needs of the
new employees resulting from the employment growth generated by the expansions and to
categorize the housing demand by affordability levels.
KMA’s report finds that 1,856 new housing units will be needed somewhere in the region to
meet the housing demand induced by the employment growth generated by the proposed
projects. Of this number, nearly sixty-two percent (62%)or 1,158 units would comprise
households earning up to 120% of the area median income (AMI), and nearly forty five (45%) or
826 units would comprise households below 80% AMI.
The purpose of the study session is to provide the City Council with an overview of the Housing
Needs ,Analysis report and allow for Council comment regarding the City’s approach to housing
issues as the projects move forward.
RECOMMENDATION
The purpose of the study session is to 1) provide the City Council with an overview of the
Housing Needs Analysis prepared by Keyser Marston Associates, Inc. (KMA) related to the
Stanford University Medical Center (SI_;MC) Replacement and Renewal Project and the Simon
Properties - Stanford Shopping Center (SSC) Expansion Project, and 2) allow for Council
comment regarding the City’s approach to housing.issues as the projects move forward. "
CMR: 441:08 Page 1 of 7
BACKGROUND
Review for the Stanford Medical Center and Shopping Center projects has been divided into two
phases: Phase I (Information Sharing and Preliminary Area Plan) from December 2006 through
July 2007, and Phase II (EIR and Entitlements), from July 2007 through early 2009, to culminate
with certification of the EIR and the City’s decision on the applications. A single EIR is being
prepared for both the SUMC and SSC. The Draft EIR is tentatively scheduled to be released in
Winter 2009. Information in the Housing Needs Analysis will be used in the EIR to analyze
population and housing impacts of the Projects and will also assist the City in determining the
affordable housing requirements for the Projects.
DISCUSSION
The City contracted with Keyser Marston Associates Inc. (KMA) to conduct a housing needs
analysis for the SUMC and SSC proposed expansions. The purpose of the analysis was to
determine the number of new housing units required to accommodate the housing needs of new
employees resulting from the employment growth generated by the expansions and to categorize
the housing demand by affordability levels.
KMA took the following steps to derive its findings:
KMA projected and analyzed the overall employment growth to be generated by the
proposed expansions, including the total number and types of new employees, and the
occupational distribution and compensation levels for the employees. KMA considered the
net added building area of the proposed expansions and the market square footage
requirement for employees in determining the number of new jobs to be created by the
expansions, and utilized publicly available data and data provided by Stanford to determine
the types and levels of compensation of the new jobs.
KMA calculated the total number of new households’ to be generated as a result of the
increase in employment by dividing the number new jobs to be created by the average
household size in Santa Clara.
KMA determined the number of new housing units needed based on the number of new
households, and determined the affordability level using the results of the analysis from steps
1 and 2. The KMA report concludes that the expansions will generate a net increase of 3,200
new jobs. The total number includes adjustments to account for part-time employment.
Using the Santa Clara County average of 1.72 workers per worker households, the report
finds that a total of 1,856 new housing units will be required somewhere in the region to meet
the housing needs generated by increase in the employment.
Employrnent
Stanford University Medical Center Expansion (SUMC)
The SUMC expansion will generate seventy percent (70%) or 2,242 workers of the total new
employment.
CMR: 441:08 Page 2 of 7
Stanford Shopping Center Expansion (SSC)
The proposed 240,000 square foot expansion of the SSC will generate a net increase in
employment of 958 workers, with the retail industry gaining 532 jobs, and the hospitality
industry (restaurant and hotel) hdding 446 new jobs.
The study points out that a primary difference between the projected employment at the SUMC
and the SSC is the lower compensation level of the retail and hospitality employees and the
propensity of lower wage employees to hold secondary jobs. Below is the breakdown of the
projected added employment for both SUMC and SSC.
Increase in Net Employrnent
SUMC
SHC 1,251
LPCH 891
Non-SUMC 100
Total 2,242
SSC
Retail 532
Restaurant 351
Hotel 75
Total 958
Housing
KMA’s report finds that 1,856 new housing units will be needed somewhere in the region to
meet the housing demand induced by the projected employment growth from the PrOposed
projects. Of this number, nearly sixty-two percent (62%) or 1,158 units would comprise
households earning up to 120% of the area median income (AMI), and nearly forty five (45%) or
826 units would comprise households below 80% AMI.
SUMC Expansion ,
A total of 1,301 housing units are needed in the region to meet the SUMC expansion. The
housing demand for the very-low income level below 50% AMI is 7% (91 units) and the total
affordable (very- low, low, and moderate income levels below 120% AMI) unit demand would
be 40% (526 units). The housing demand for income level above 120% AMI is 53% or 684
housing units for SUMC.
SSC Expansion
A total of 555 housing units are needed in the region to meet the SSC expansion. The housing
demand for the very-low income level below 50% AMI for the SSC is significantly higher than
at SUMC at 70% (389 housing units). The total demand for affordable units (below 120% AM!)
is projected at 27% (152 units). On the other hand, the housing demand for income level above
120% AMI is only 3% (14 units).
The table below shows the breakdown of the number of required housing units by affordability
level.
CMR: 441:08 Page 3 of 7
Number of Housing Units by Affordabilit¥ Level
INCOME LEVEL SUMC SSC Total
under 50% AMI 91 389 480
50% to 80% AMI 228 118 346
80% to 100% AMI 149 23 172
100% to 120% AMI 149 11 160
120% to150% AMI 190 7 197
Over 150% AMI 494 7 501
Total 1,301 555 1,856
Palo Alto Housing Requirements
Like other Bay Area jurisdictions, Palo Alto has an extremely limited supply of vacant
residential land. Most of the City’s development potential consists of infill on small vacant lots,
redevelopment of existing properties, and conversion of underutilized non-residential lands to
higher density residential or mixed-use projects.
State Housing Element law requires that localities provide for their "fair share" of the region’s
housing need. The Association of Bay Area Governments (ABAG) determined that Palo Alto’s
projected need for the period from January 1, 2007 - June 30, 2014 will be 2,860 units. The
projected housing is described as the Regional Housing Need Allocation (RHNA). In addition to
projecting overall housing needs, ABAG also projects housing needs by income category. The
intent of this action is to equitably distribute households by income category so that no one city
or county is "impacted" with a particular income group. The table below shows how the City of
Palo Alto’s 2007-14 housing need by income category is allocated by ABAG.
Palo Alto Regional Housing Need Allocation 2007-2014
INCOME LEVEL
Very Low (Under 50% AMI)
Low (50% to 80% AMI)
Moderate (80% to 120% AMI)
Above Moderate (Above 120% AMI)
tOTAL
NEED
690
543
641
986
2,860
APPROVED
2007-2014
57
16
105
713
891
UNMET
NEED
633
527
536
273
1,969
As shown in the table above, the unmet housing need remains high for the 2007-14 RHNA. The
SUMC and SSC expansions will result in minimal additional demand for housing during the
current Housing Element cycle. It is not yet certain whether or how the expansions will affect
the demand for housing in future Housing Element cycles.
CMR: 441:08 Page 4 of 7
Potential Housing Sites and Approaches
The City and the applicants plan to determine through the Development Agreement how much
housing to require in conjunction with the developments, as well as the affordability of such
housing. In addition, the DeveIopment Agreement will need to outline whether housing needs are
addressed through fees, dedication of sites for housing, construction of housing, or some
combination of those.
Housing needs for most commercial projects are addressed through payment of housing impact
fees. The Shopping Center project is subject to the existing housing impact fee ordinance and it
will be required to pay fees. The Medical Center is currently not subject to impact fees under the
existing ordinance and both the City and applicants have agreed to address the housing needs for
this project through the entitlement process. There are several ways to address the project related
housing demand, including expansion of fee program to include Medical Center, adoption of
inclusionary housing regulations for hospital zones or inclusion of housing agreement in
Development Agreement. Given the proximity of the project to transit sites, the availability of
Stanford controlled land in the vicinity of the project and the City and applicants’ mutual desire
to reduce project generated traffic, staff is currently focusing on incorporating housing solutions
into the Development Agreement.
The Stanford University Medical Center Area Plan identified four (4) potential housing sites in
close proximity to the project:
1.A 6.7-acre site was included in the Sand Hill Road Projects EIR and is zoned by the City
of Palo Alto for high density residential (RM-40). The RM-40 site is developed presently
with 148 housing units. Approximately 80-100 additional housing units could be
accommodated on this site under the current zoning.
2.An 8-acre housing site at Quarry Road and Arboretum Road that is located in
unincorporated Santa Clara County was approved,in Stanford’s General Use Permit
(GUP) to allow development of 200 housing units for hospital residents and post-
doctorate students. Additional units at this site may be permitted by the GUP, subject to
some restrictions.
3.A 6.2-acre housing site at Quarry Road and E1 Camino Real, also located in
unincorporated Santa Clara County, was approved in Stanford’s General Use Permit to
allow development of 150 housing units for hospital residents and post-doctorate
students. Again, increased density may be permitted by the GUP, subject to some
restrictions.
4.The "Red Cross" site near the current VTA terminal and adjacent Stanford lands leased to
Palo Alto in the Palo Alto Intermodal Transit Station (PAITS) area. This site could
accommodate approximately 30 units.
Other potential housing sites could be explored, including other General Use Permit sites if and
when those identified are determined not to be feasible.
PLANNING AND TRANSPORTATION COMMISSION REVIEW
On October 1, 2008, the Commission held a study session on the Housing Needs Analysis
prepared by KMA. The Commission provided comments on the housing study and employment
CMR: 441:08 Page 5 of 7
that would be generated by the projects. The Commission continued the study session to October
29, 2008 to provide an additional opportunity for comments from Commissioners. The minutes
from each meeting are contained in Attachment B.
NEXT STEPS
The City’s environmental consultant, PBS&J, is currently preparing the Draft EIR. The targeted
issues teams continue to meet to review detailed technical information for inclusion in the Draft
EIR. City staff anticipates providing the Planning and Transportation Commission and Council
with a draft traffic analysis for review prior to the release of the Draft EIR. The City’s urban
design peer review consultant, Bruce Fukuji, is preparing a Village Concept Alternative for the
Draft EIR. The Draft EIR is tentatively expected to be released in early 2009.
On July 14, 2008, the City Council provided comments on the scope of analyses for fiscal impact
reports for the projects. The City has contracted with Economic Research Associates (ERA) to
perform an independent hotel analysis to understand the current hotel market within Palo Alto
and has contracted with Applied Development Economics (ADE) to perform a peer review of the
fiscal analyses and "Urban Decay" analysis prepared by CBRE, the applicant’s fiscal consultant.
It is anticipated that ERA’s and ADE’s analyses will be provided to the Commission and Council
in early 2009. City Council will review the design concept when the plans and Development
Agreement are considered.
Stanford continues to present designs for study sessions and preliminary review of the Stanford
Hospital and Clinics, Lucile Packard Children’s Hospital, School of Medicine, Hoover Pavilion
and Design Guidelines to the City’s Architectural Review Board (ARB). The applicant for the
Stanford Shopping Center continues to work on the design guidelines for the Shopping Center.
The ARB review of the different components of the project will continue through early 2009.
STEVEN TURNER
Senior Planner
DEPARTMENT HEAD:
CURTIS WILLIAMS
Interim Director of Planning and Community
CITY MANAGER APPROVAL:
KEENE
anager
CMR: 441:08 Page 6 of 7
ATTACHMENTS
Attachment A: Housing Needs Analysis Proposed Expansions: Stanford University Medical
Center Stanford Shopping Center, prepared by Keyser Marston Associates,
Inc., June 2008.
Attachment B:October 1 and October 29, 2008 Planning and Transportation Commission
minutes.
COURTESY COPIES
Cara Silver, Senior Assistant City Attorney
Rick Jarvis, Special Counsel
F. Gale Connor, Special Counsel
William T. Phillips, Sr. Assoc. Vice President Stanford University - Land, Buildings & Real
Estate
Jean McGown, Director of Comm. Rel. Office of Government and Community Relations
Charles Carter, Director Land Use and Environmental Planning Stanford University
Catherine Palter, Asst. Director Land Use and Environmental Planning Stanford University
Mark Tortorich, Director of Design and Building Stanford Hospitals. & Clinics / Lucile Packard
Children’s Hospital
Barbara Schussman, Bingham McCutchen
Art Spellmeyer, Simon Property Group
John Benvenuto, Simon Property Group
Anna Shimko, Cassidy Shimko, Dawson, Kawakami
Trixie Martelino, PBS&J
Whitney McNair, Metropolitan Planning Group
CMR: 441:08 Page 7 of 7
Attachment A
DRAFT
Housing Needs Analysis
Proposed Expansions:
Stanford University Medical Center
Stanford Shopping Center.
Prepared for:
City of Palo Alto
Prepared by:
Keyser Marston Associates, Inc.
June 2008
Table of Contents
INTRODUCTION
Proposed Development
Analysis Guidance, Methodology and Sources
Report Organization
Data Sources and Qualifications
SECTION I - PROJECT DESCRIPTION AND TOTAL EMPLOYMENT INCREASE
Project Description / Changes in Building Area
¯ SUMC Employment
Shopping Center Total Employment
Part Time Employees
Employment Increase Summary
SECTION II - THE JOBS HOUSING ANALYSIS
Methodology
Data Sources for Employee Occupation and Compensation Levels
HCD Income Definitions
Analysis Step 1- Estimate of Total New Employees
Step 2 - Adjustment from Employees to Employee Households
Step 3 - Occupational Distribution of Employees
Step 4 - Estimates of Employee Households Meeting the Lower Income Definitions
Step 5 - Estimate of Household Size Distribution
Step 6 - Estimate of Households that meet HUD Size and Income Criteria
Summary by Income Level ,
SECTION III - INDEPENDENT RESEARCH ON MEDICAL CENTER EMPLOYMENT
COMPOSITION AND TRENDS
SUMC as a Unique Facility
Comparison to UCSF
Labor Union Contract Comparisons
Part Time Employment Sensitivity Analysis
Future Employment Profile
SECTION IV- UNDERLYING CONCEPTS AND ASSUMPTIONS
The Relationship between Job Growth and Population Growth
The Relationship between Construction and Job Growth
Substitution Factor
Indirect Employment and Multipliers
Analysis Assumptions - Potential Over and Understating of Results
SECTION V - INTERIM TIME HORIZON ANALYSIS RESULTS
Employment Growth by 2015
Analysis Results
Page
1
4
16
30
37
41
DRAFT
INTRODUCTION
The following report is an analysis of the housing needs associated with the proposed
expansion of Stanford University Medical Center and Stanford Shopping Center in the City of
Palo Alto. The report has been prepared by Keyser Marston Associates, Inc. for the City of Palo
Alto, pursuant to the City’s request and contractual agreement. Keyser Marston Associates is a
subcontractor to PBS&J, the firm responsible for the environmental impact report for the project.
Stanford University Medical Center (SUMC) is comprised of Stanford Hospital and Clinics
(SHC), the Lucile Packard Children’s Hospital (LPCH), and the Stanford University School of
Medicine (SoM). The proposed expansion would add approximately 1.3 million square feetof
building area. The proposed expansion of the Stanford Shopping Center (SCC) adds
approximately 360,000 square feet of building area including retail space, restaurants, and a
hotel.
In order to understand the proposed projects and their impacts, the City is seeking a range of
analyses to assist in the decision-making, negotiation, and entitlement process. This report
provides an analysis of the anticipated employment to be added to SUMC and SSC and the
housing needs of new employees, by housing affordability level. This report is expected to
accompany the Environmental Impact Report (EIR) for the proposed project, along with other
documents analyzing other aspects of the proposed project.
Proposed Development
The expansion of Stanford University Medical Center is part of a large scale rebuilding and
expansion program to be implemented over a ten year period. The. rebuilding and expansion
program is driven by California state law requiring hospitals to meet life safety requirements, the
inability to adequately serve constituents with current facilities, the need for facilities to better
meet new technology and hospital service standards, and to accommodate future growth. This
housing needs analysis is concerned only with the expansion aspects of the rebuilding program,
or more specifically, net new employment associated with the rebuilt and expanded facilities.
As part of the expansion program, Stanford Hospital and its clinics .(SHC) would add 144-beds
and approximately 800,000 square feet of building area. LPHC would expand by 1Q4 beds and
add approximately 460,000 SF of building area. In addition, space currently owned by Stanford
and leased to health providers not employed by Stanford (or non-SUMC providers) will be
rebuilt and increased by approximately 40,000 square feet. No net increase in building area or
employment is proposed for the School of Medicine although approximately 415,000 square feet
of building area would be demolished and replaced.
Keyser Marston Associates, Inc.
\\Sf-fs 1 \wp\l 2\12062\009\001-003. doc; 6/6/2008
June 2008
Page 1
DRAFT
The proposed expansion of the Stanford Shopping Center would add 360,000 square feet
including 192,000 SF of retail space, 48,000 square feet of restaurant space, and a hotel with
120 rooms, conference centei" and other ancillary facilities.
Analysis Guidance, Methodology and Sources
The Housing Needs Analysis work program was guided by a team from the City of Palo Alto.
The team was comprised of people from relevant City departments and also outside consultants
assisting the City in the processing of the Stanford Medical Center and shopping center
entitlements. KMA met with the City team on several occasions to coordinate on assumptions
and data, inputs and other related matters and to present analysis findings. KMA also
communicated with SUMC personnel to clarify Stanford data and matters pertaining to
employment composition.
SUMC provided an extensive level of data on the composition of the existing employment base
at Stanford and compensation levels. As inidicated in the following report, KMA conducted
independent research to understand medical center employment and compensation levels and
to evaluate the material provided by Stanford.
For the shopping center expansion, KMA used published sources on occupation and
compensation levels for analyzing employment and compensation levels associated with the
added retail, restaurant and hotel space. It is noted that people who work in retail, restaurant
and hotel space are employees of the building tenants and not the shopping center itself.
Shopping center and hotel employees are far more typical of similar space elsewhere, as
compared to the unique staffing of a facility like a university medical center.
The analysis of housing needs for both the SMUC and SSC expansion projects has been
conducted by using a jobs housing nexus model. The model was originally developed over 15
years ago by Keyser Marston Associates to analyze the linkage between land use and housing
needs by housing affordability level. The model has been refined and updated over the years
and in more recent years it has been modified to analyze specific projects such as the medical
center and shopping center expansions. All data sources and inputs are noted and explained as
well as the model methodology and underlying assumptions.
Report Organization
This report is organized into four sections:
Section I provides more information on the proposed project descriptions and on total
employment projected to be added in the new space.
Section II presents the housing needs analysis by affordability lever, step by step
including a documentation of sources.
Keyser Marston Associates, Inc.
\\Sf-fsl\wp\l 2\12062\009\001-003. doc; 6/6/2008
June 2008
Page 2
DRAFT
¯Section III provides a brief summary of independent research undertaken by KMA on
medical center employment composition and trends.
¯Section IV provides an explanation of underlying concepts and assumptions in the
conduct of a jobs housing analysis.
¯Section V contains a data set of assumptions and analysis results for the interim year
2015.
An Appendix section provides tables and other supporting information.
Data Sources and Qualifications
The analysis in this report has been prepared using the best and most recent data available.
Local data was used wherever possible. Other sources, such as the U.S. Census, U.S. Bureau
of Labor Statistics, and the California Employment Development Department were used
extensively. SUMC supplied data on compensation levels of existing medical center staff. While
we believe all sources utilized are sufficiently accurate for the purposes of the analysis, we
cannot guarantee their accuracy. Keyser Marston Associates, Inc. assumes no liability for
information from these other sources.
Keyser Marston Associates, Inc.
\\Sf-fs 1 \wp\l 2\12062\009\001-003.doc; 6/6/2008
June 2008
Page 3
DRAFT
SECTION I - PROJECT DESCRIPTION AND TOTAL EMPLOYMENT INCREASE
This section provides more in~:ormation on the proposed rebuilding and expans on programs and
how changes in total employment are affected. The work program entailed working with the City
of Palo Alto and Stanford to obtain clarification on what employment is counted and not
counted, on-site versus off-site activities, how contracted services relate to employment counts,
how part time employment is accounted for, and other issues affecting net new employment
which is the basis for determining net new housing needs.
Project Description / Changes in Building Area
Following is a description of the project which consists of two major components: the medical
center expansion and the shopping expansion. A summary of net changes to building area is
provided on Table I - 1 with backup detail for individual medical center buildings on Table I -2.
Since the shopping center expansion does not involve demolition of any existing employment
space we only looked at new building area with the shopping center.
Stanford University Medical Center Expansion
The Stanford University Medical Center is comprised of two major hospitals: Stanford Hospital
and Clinics (SHC), Lucile Packard Children’s Hospital, and a portion of the Stanford University
School of Medicine (SoM). The proposed project replaces portions of the two existing hospitals,
expands the number of beds at each, and replaces several School of Medicine buildings. The
project is designed to expand the capacity of the hospitals to serve additional patients, replace
obsolete facilities, improve physical configuration, move to single-bed patient rooms, and attain
compliance with State building code requirements. In summ~ry, the rebuilding program is being
undertaken to meet new Codes, to "right size" for current technology and patient service
standards, and to allow for future growth.
SHC currently has 456-beds and approximately 1.5 million square feet of building area. With the
expansion, SHC would add 144 beds and approximately 800,000 square feet net additional
building area. In addition, approximately 700,000 square feet of existing building area would be
demolished and replaced and another 500,000 square feet of existing space would be
renovated.
LPHC has 257 beds and would expand by 104 beds for a total of 361 beds. The expansion
includes a net increase in LPCH building area of approximately 460,000 SF. In addition,
approximately 80,000 square feet of existing buildings would be demolished and replaced and
another 275,000 square feet would be renovated.
Keyser Marston Associates, Inc.
\\Sf-fsl\wp\l 2\12062\009\001-003. doc; 6/6/2008
June 2008
Page 4
DRAFT
No net increase in building area is proposed for the School of Medicine; however, four buildings
encompassing 415,000 square feet of building area would be demolished and replaced with
new facilities.-
The medical center currently leases approximately 53,000 square feet of space to community
health care providers which are not SUMC employees, but may practice in a SUMC hospital.
These people are referred to as "non-SUMC providers". The buildings which house this leased
space are among those to be demolished as part of the project. Some tenants which do not
require immediate proximity to the medical center wouldbe relocated to space in Menlo Park
which has been master leased by SUMC. Others would be relocated to renovated facilities
elsewhere in the medical center complex. A new 60,000 square building is proposed to
accommodate additional community health care providers. The net increase in space available
for non-SUMC providers, attributable to the proposed project, is approximately 40,000 square
feet.
Stanford Shopping Center Expansion
The proposed expansion of the Stanford Shopping Center would add a total of 360,000 square
feet of building area including 192,000 square feet of retail, 48,000 square feet of restaurants
and a 120,000 square foot/120 room hotel. All of the existing retail space in the center would
remain. The additional buildings would be constructed on land currently occupied by parking.
SUMC Employment
SUMC provided figures for current and projected levels of employment as part of the application
materials provided to the City of Palo Alto. These figures were prepared based on business
models for the hospital which incorporate projected growth for the various service areas within
the hospital, trends in medicine, projected patient population and other factors. The data include
estimates for 2006, 2007, and several interim years through project build out. Per SUMC, staff
growth through 2007 is related to completion of certain interior renovations currently underway
and is not related to the proposed project. Employment in 2007 is used as the base line year to
represent existing employment levels.
Employment estimates prepared by SUMC were vetted by KMA through several in-person
meetings and phone conferences. The purpose of these discussions was to understand the
basis for the estimates and confirm whether all employees associated with the facility are
accounted for in the estimates. The City retained an advisor who is an expert in hospital
facilities who also reviewed the SUMC building program and employment estimates.
Keyser Marston Associates, Inc.
\\Sf-fs1\wp\12\12062\009\001-003.doc; 6/6/2008
June 2008
Page 5
DRAFT
Employment Density
KMA evaluated the employment estimates in terms of density of employmentor square foot
building area per employee both existing and projected. KMA has prepared economic analyses
on other medical facilities, including jobs housing linkage analyses for general programs and
analysis for specific projects. For these assignments, KMA has assembled information from a
range of sources on medical facilities throughout California and their employment levels.
A key consideration in evaluating the SUMC employment numbers is that the expansion is
designed to address multiple objectives including an increase in the capacity of the hospital to
serve additional patients, improvements to the physical configuration of the facility to address
certain operational concerns, attain compliance with statutory requirements, and move to single-
bed patient rooms. Some aspects of the expansion will add employees.while others will add
building area without adding employees. Conversion from semi-private beds to single-bed
patient rooms is an example of a modification that adds building area but does not generate a
need for additional employees. Therefore, in our evaluation, we considered the reasonableness
of employment density estimates for the entire facility upon completion rather than the
incremental increase in employment.
On an overview level, employment density both at the current time and projected (Table I-4),
serve as an initial cross check on the reasonableness of the employment levels visa vis the
building area. One expects the density under current conditions to be higher than the projected
level due to overcrowding and obsolesce of many facilities. For the density after rebuilding and
expansion, one expects the range to be consistent with other new medical facilities built and in
planning elsewhere, or between 300 and 400 square fee per employee for the SHC and LPHC
components.
School of Medicine
Replacement of the SoM facilities was treated as neutral to employment growth. The SoM is not
proposed to have any net change in building area and is anticipated to have a slight (4%)
decrease in employment within the City of Palo Alto. We did not deduct the minor projected
decrease in SoM employment against employment growth in the other components of the
project given that no net decrease in building area is proposed.
Contracted Services, Including Nursing
One of the areas of clarification is that of contracted services, which in some medical centers
can be substantial. All food service operations, for example, are sometimes contracted to an
outside provider.
Keyser Marston Associates, Inc.
\\Sf-fs1\wp\12\12062\009\001-003.doc; 6/6/2008
June 2008
Page 6
DRAFT
Outside of nursing, as described below, SUMC has a fairly minimal level of contracting for
regular employment positions and on-going services but, like most operations, does contract for
special projects of a more temporary nature. For example, SUMC has its own information
technology staff but will contract to an outside firm for a special application or upgrade. Certain
senior management positions are contracted out such as food service and materials
management. These positions are few in number and highly compensated, and as a result were
not viewed at warranting adjustments for the purposes of the analysis.
SUMC staff confirmed that SUMC has among its employment base its own food preparation and
service staff, security staff, building and landscape maintenance staff, clerical, family services,
and virtually all staff with the exception of the few contract positions.
Nursing represents a special situation at this point in time and with respect to future
expectations. A substantial portion of nursing, as well as other specialists such as pharmacists
and various types of technicians are contracted out today. SUMC estimates that there are
approximately 400 such positions at the current time. SUMC (like all hospitals in the region) is
forced to contract for these services because providers are in such short supply that the
hospitals have no choice but to retain them in any way they can get them. Because hospitals,
including those within SUMC, would prefer that these positions be filled by regular employees,
who are both less expensive and more predictable in their availability, all nursing and other
contracted services of this nature are counted as regular employees both now and in the
projection set.
On-Site and Off-Site Operations
The SUMC application materials provided comprehensive employment projections for both on-
site and off-site operations. However, only growth in employment on-site from the SUMC project
under consideration by the City is included in the analysis. Off-site operations include SUMC
administration which is located in the Page Mill Research Park and is expected to remain there.
Another major base of off-site employment will be the outpatient clinic under construction in
Redwood City. The School of Medicine has facilities on the Stanford campus in unincorporated
Santa Clara County.
The data set on employee compensations provided by SUMC included off-site emploYees due
to technical limitations in SUMC’s payroll database which made it difficult to isolate on-site
employees only. As is further described in Section II, we determined that this was acceptable for
purposes of analyzing the employee compensation structure.
Other Adjustments to Employment Levels
While the employment totals upon build-out do appear generally reasonable, KMA’s review of
the SUMC employment data resulted in several adjustments to the employment numbers to
Keyser Marston Associates, I nc,
\\Sf-fs 1 \wp\l 2\12062\009\001-003. d oc; 6/6/2008
June 2008
Page 7
DRAFT
accurately reflect the net increase in employment. Adjustments to the employment numbers
made by KMA for purposes of the housing needs analysis are described below:
Inclusion of the estimated increase in Non-SUMC community health care provider
employment based on the additional space that will be made available for lease to
community health care providers;
Adjustment to the existing employment numbers to eliminate double counting of
employees who were terminated and then replaced during the course of the year; a
condition that became evident in analyzing two different sets of current SUMC
employment data. (Appendix Table 2).
Summary
In summary, existing and projected build out employment by major component of SUMC is as
follows:
Employment
Existing Buildout
SUMC
SHC 5,240 6,562
LPCH 1,666 2,655
SoM 2,823 2,717
Non-SUMC Providers 151 257
9,880 12,191
Shopping Center Total Employment
Stanford Shopping Center provided projections of added employment as part of the application
materials submitted to the City of Palo Alto. These projections were prepared based on existing
employment density at the shopping center. It is noted that most people who work in shopping
centers are not employees of the shopping center per se; they are employees of the multitude of
tenants that lease the space that comprises the shopping center. As a result, employment at
shopping centers is always based on surveys, experience, and indirect sources as opposed to a
single payroll such as that available from SUMC.
KMA compared the employment estimates to industry standard employment densities. The
projected retail employment equates to an employment density of approximately 300 square
feet per employee. This exceeds typical employment densities for new retail centers which
generally fall into the range of 330 to 400 square feet per employee. Projected restaurant
employment equates to approximately 115 square feet per employee, which is at the high end
of the range for restaurants, which are often closer to 200 square feet per employee.
Keyser Marston Associates, Inc.
\\Sf-fs1\wp\12\12062\009\001-003.doc; 6/6/2008
June 2008
Page 8
DRAFT
The higher density estimates are appropriate for Stanford Shopping Center because a key
factor driving employment density is sales volumes. Since Stanford Shopping Center achieves
high sales volumes per square foot as compared to average retail centers, higher density of
employment is expected. Higher sales volumes require more employees on the floor and more
cooks and servers in food service outlets. In our judgment, the applicant’s approach to
estimating employment growth based on current employment densities at the shopping center is
reasonable and yields estimates consistent with the sales volume achieved in the center.
Hotel employment levels were estimated by PKF, the Applicant’s hotel consultant, based on an
evaluation of required staff positions for a boutique hotel with limited meeting space. The 90
employees estimated by PKF equates to about 0.75 employees per room, or at the low end of
the typica! range for mid to full service hotels. Employment estimates provided in the application
materials are somewhat lower yet and are outside of the range we would expect with a full
service hotel. The applicant made their hotel consultant, PKF, available to KMA to provide
additional detail on the employment estimates for the hotel. The employment numbers used the
analysis are based on this subsequent discussion with PKF and are revised upward from the
initial estimates that were provided in the application materials.
Summary
Net new employment for the proposed expansion of Stanford Shopping Center is as follows:
Stanford Shopping Center Employment
New Retail 638
New Restaurant 421
New Hotel 90
1,149
Part Time Employees
Part time employees represent a particular challenge in estimating income levels of employees
because information is rarely available about the extent to which part time employees hold other
jobs. Unfortunately national and state research on this subject is also deficient for the purposes
of an analysis of this type. To address this situation, KMA prepared two analyses of extreme
assumptions to bracket the range, and developed a reasonable mid range assumption as a best
estimate for analysis purposes.
The assumptions with respect to part time employees also holding other jobs affects both the
count in net increase in total employment and the total compensation level, and thus household
income. The impact on increase in employment is drawn from the concept that the part time
employees who hold other jobs have housing needs that are only partially attributable to the
project. For example, a nurse who splits time 50%/50% between SUMC and another hospital
Keyser Marston Associates, Inc.
\\Sf-fs1\wp\12\12062\009\001-003.doc; 6/6/2008
June 2008
Page 9
DRAFT
would be counted as 0.5 employees. To account for the partial attribution a discounting
methodology was derived.
Part Time at SUMC
At SUMC, part time employees averaging less than 40 hours per week constitute approximately
40% of total employment, or approximately 3,300 of 8,300 total employees on- and off-campus.
Of these employees approximately 2,200 work a schedule approaching full time (includes
employees working at least 70% of a full time schedule with majority at 90% time or above). The
balance of approximately 1,100 employees are part time employees at less than 70% of a full
time schedule.
To test the extremes of possible assumptions, KMA performed a sensitivity analysis. At one end
of the spectrum, we assumed no part time employees hold other jobs; at the other end we
assumed all part time employees hold other jobs. The extreme assumption for no other job was
applied irrespective of the .percent of full time employees worked. For the extreme assumption
that all part time employees hold another job, the percent employment at SUMC, as provided b~t
SUMC, was used as the percent attributable to the proposed project. The resulting range of
number of employees counted in thismanner was 2,142 net new employees at the low end to
2,417 net new employees at the high end. Since the analysis was also performed to test the
impact on compensation and household income level, further discussion is contained in Section
III.
To develop a mid range scenario regarding which employees will be likely to have other
employment and which are not, KMA assumed that employees at 70% time or more will not hold
other employment. Part-time employees working less than 7’0% time are assumed to have other
employment sufficient to bring those employees up to a full time schedule inclusive of both
SUMC and non-SUMC employment. These assumptions were designed to give recognition to
the fact that some part time employees have other employment and others do not, a condition
that is probably true at all percentage levels, but certainly more likely at the division used in the
analysis. With the selected adjustment for part time employees, the number of net new
employees added by the SUMC expansion is 2,243.
Part Time at SSC
The shopping center estimates that approximately 1/3 of existing employees are part time and
that this ratio will hold for new employees with the expansion. However, data on the portion of
retail employees who work full time as compared to some partial time is not available. As a
result, a detailed analysis of part time employees performed for the medical center could.not be
duplicated in the analysis of the shopping center. Part-time retail, restaurant, and hotel
employees are assumed to average about 20 hours per week (or 50% time). The fraction of
part-time employees attributable to the project was estimated based on the assumption that
Keyser Marston Associates, Inc.
\\Sf-fs 1\wp\12\12062\009\001-003.doc; 6/6/2008
June 2008
Page10
DRAFT
many part-time employees in the retail, restaurant, and hotel industries do have other
employment. A notable difference between employees in retail and the hospitality industry
(restaurants and hotels) and ~he medical center is the low compensation level of the retail and
hospitality employees and the greater economic necessity to hold another job.
Employment Increase Summary
Table I - 3 summarizes the net increase in employment resulting from the proposed project,
including adjustments to account for the allocation of part time employees. The net added
employment from the project is summarized in the table below. The figures below have been
adjusted to account for the allocation of part time workers described above.
Net Added Employment
Stanford University Medical Center
SHC
LPCH
Non-SUMC Providers
Stanford Shopping Center
Retail
Restaurant
Hotel
Total
1,251
891
100
2,243
532
351
75
957
3,2O0
Keyser Marston Associates, Inc.
\\Sf-fs 1 \wp\12\12062\009\001-003,doc; 6/6/2008
June 2008
Page 11
Oo
0000
oooo
e-
o ooo ooo oo
ooo0oo
ooo
TABLE I-2
BUILDING DETAIL OF SUMC DEVELOPMENT PROGRAM
SUMC & SSC EXPANSION - HOUSING NEEDS ANALYSIS
PALO ALTO, CA WORKING DRAFT FOR REVIEW BY STAFF ONLY
Existing
Building SF
SHC
1101 Welch 40,100
Original Medical Center 441,201
Core Expansion 223,850
Hoover- Misc. Shops & Storage 13,831
Entry 77
Hoover: Arboretum Children’s Center 7,375
Blake-Wilbur Clinic 73,100
Advanced Medicine Center 224,836
801 Welch 12,671
Hoover Pavilion 84,230
Hospital Modernization Project 431,280
New Hospital Buildings
New Hoover Medical Office Building
New Clinics and Medical Offices
Total 1,552, 551
Occupied by SUMC 1,522,451
Occupied by Non-SUMC providers 30,100
Proposed
Building SF
7,375
73 100
224 836
12 671
84 230
431 280
1,100 000
60 000
429 000
2,422,492
2,332,392
90,100
Net Change
Building SF Note
869,941
809,941
60,000
demolish
demolish
demolish
demolish
demolish
retain
retain
retain
retain
renovate / reuse
renovate / reuse
construct
construct
construct
LPCH
701 Welch 56,300
703 Welch 23,500
Existing Hospital 274,700 274,700
New Hospital Buildings 471,300
New Clinics and Support Space 50,000
Total 354,500 796,000
Occupied by SUMC 331,625 796,.000
Occupied by Non-SUMC providers 22,875 0
School of Medicine
Existing [Edwards, Lane, Always, Grant]
Falk Building
New [FIM #1, FIM #2, FIM #3]
Total (100% SUMC)
441,500
464,375
(22,875)
demolish
demolish
renovate / reuse
construct
construct
414,977 demolish
52,226 52,226 re~in
414,977 construct
467,203 467,203 0
Total 2,374,254 3,685,695 1,311,441
Occupied by SUMC 2,321,279 3,595,595 1,274,316
Occupied by Non-SUMC provide~52,975 90,100 37,125
Source: Stanford University Medical Center Project Data as of April 2008; SUMC comments January and February 2008.
Notes:
1 Per SUMC, existing Non-SUMC providers are to be relocated to the existing Hoover Pavilion Building and additional Non-SUMC providers are
to be housed in the 60,000 SF new Hoover Medical Office Building.
Prepared by: Keyser Marston Associates, Inc.
Fiiename: \\Sf-fs1\wp\12\12062\009\Nexus model 6-5-08.xls; I-2 SUMC building detail; 6/5/2008; dd
J
LLI
I--ZLIJ
Z
wO
0
~z
~no
o
L~I
>-
J
¯¯o
~zz z
~ g
D~
QuJZZ
CDO 0 0CDO (DOO0 0 0
zzz
zzz
~oo~ooo
ZZZ
DRAFT
SECTION II - THE JOBS HOUSING ANALYSIS
This section summarizes the analysis of housing needs associated with employment growth
attributable to the SUMC and SCC expansion proposals. A brief overview of the methodology
and structure of the analysis is provided, followed by a walk through of the analysis steps to the
output and conclusions.
Methodology
In estimating the linkages between added employment, worker households, and housing needs
by affordability levels, KMA employed its proprietary jobs housing nexus model. The KMA nexus
model was originally developed for analyses supporting housing linkage programs which place
affordable housing obligations on commercial development. Jobs housing linkage programs
have been adopted in a number of jurisdictions throughout California supported by analyses
using this model including the City of Palo Alto’s own program. The model has also been refined
and modified for use in quantifying the housing impacts of specific large projects. The model
inputs are all local data to the extent possible, and are fully.documented.
The basic methodology is to establish the income or compensation of employees, put
employees into households which have more than one income on average, establish household
income and allocate to household size by means of U. S. Census relationships. Income by
household size can then be translated to relationship to median income and affordability level as
established by the California Housing and Community Development Department.
Data Sources for Employee Occupation and Compensation Levels
The jobs housing nexus model is set up to use publicly available data sets on employee
incomes and occupations but can also be adapted to work with other data sets. At the outset of
this assignment, the applicants were given the option to provide data on occupation and
compensation of employees in-lieu of publicly available data sets.
The shopping center did not elect to provide compensation data. Publicly available data sets
were viewed as sufficiently representative of the likely compensation structure for new retail,
restaurant, and hotel employees. Compensation data specific to the center would have been
costly and difficult to obtain and analyze due to the huge number of employers. The shopping
center leases space to a large number of tenants who have no obligation to reveal
compensation data. There was no certainty of obtaining compensation data from a large enough
number of tenants to have a representative view of the overall compensation structure at the
center. In addition, validation and analysis of various data sets provided by different tenants in
several formats would have been challenging. No hotel operator had been identified so it would
have been necessary to use publicly available data for the hotel in any case.
Keyser Marston Associates, Inc.
\\Sf-fsl \wp\12\12062\009\001-003.doc; 6/6/2008
June 2008
Page 16
DRAFT
SUMC elected to provide its own compensation data based on concerns that public data sets
would not capture the unique occupational and compensation structure of the medical center:.
As a nationally recognized teaching and research hospital, SUMC offers a degree of specialized
care not available at most hospitals in the Bay Area. SUMC has indicated that this level of care
is associated with an occupational and compensation structure differentiated from other
hospitals. The unique nature of the SUMC medical center and the level of care offered are
described in more detail in Section 111. Public data sets were applied for analysis of community
health care providers who occupy leased space in the SUMC campus.
SUMC Data Provided
The data provided by SUMC consisted of employee compensations for all existing employees of
the medical center. SUMC specified the number of employees within $5,000 ranges up through
$200,000 and the total number of employees earning over $200,000. (See Appendix Table I1.)
The data is for a "snapshot" of employee compensations as of the end of 2006.
The compensation information provided by SUMC is inclusive of overtime and bonuses and
thus represents total compensation.
The SUMC data covers employees located at the medical center as well as certain off-site
facilities operating as of the end of 2006. Based on discussions with SUMC, we understand off-
site functions to be primarily administrative and certain laboratory procedures. SUMC has
indicated that compensations for off-site functions tend to be somewhat lower than on-site
functions. This is consistent with our general expectation given the occupational structure of
clerical vs. hospital based occupations. Therefore inclusion of some off-site functions in the
analysis tends to understate overall employee compensatiorls at the medical center.
Summary
The analysis is separated into two components based on the data sets used:
1.Published sources for analysis of the Stanford Shopping Center expansion and Non-
SUMC community health care providers
2. SUMC custom data set for SHC and LPCH
The KMA jobs housing nexus model is applied to both situations but some of the steps in the
analysis are different. Analysis of project components based on publ!shed data is presented on
Tables II -2 A through C. Analysis of project components based on SUMC compensation
information is present in Tables II - 3 A and B.
Keyser Marston Associates, Inc.
\\Sf-fsl \wp\12\12062\009\001-003.doc; 6/6/2008
June 2008
Page17
DRAFT
HCD Income Definitions
The income levels or tiers used in the analysis are based on Area Median Income (AMI) in
relation to local median income by household size. The median income levels for each county or
group of counties is issued annually by the U.S: Department of Housing and Urban
Development (HUD), and released by the California Department of Housing and Community
Development. Most housing programs and policies in California and its jurisdictions utilize these
income definitions. The income levels utilized in the analysis are Santa Clara County limits in
effect in 2006 and 2007, the years applicable to our compensation data. The 2008 income
levels were not released when this analysis was originally prepared but are unchanged from
2006 and 2007. In addition, we would use 2006 and 2007 income definitions for consistency
with the employee compensation data in any case.
Analysis Step 1- Estimate of Total New Employees
Estimates of employment growth were provided by the applicants, vetted by KMA, and adjusted
as described in Section I of this report. The employment inputs to the analysis are summarized
on Table I1-1.
Step 2 - Adjustment from Employees to Employee Households
This step (Table I1-1) converts the number of employees to the number of employee households
that will work at or in the building type being analyzed. This step recognizes that there is, on
average, more than one worker per household, and thus the number of housing units in demand
for new workers must be reduced. The workers per worker household ratio eliminates from the
equation all non-working households, such as retired person’s, students, and those on public
assistance. The Santa Clara County average of 1.72 workers per worker households is used in
the analysis because workers will be more similar to the County as a whole than the smaller
City of Palo Alto profile.
Step 3 - Occupational Distribution of Employees
Occupational distribution for employees added with the SSC expansion and Non-SUMC healtt~
care providers is based on data from a national survey by the U.S. Department of Labor.
Occupation refers to job description such as management, sales clerk, cashier, etc. The survey
provides occupational composition for various employment "industries", which KMA translates to
building types. National statistics are used because local data is not generally available, and for
many industries, national data is a good reflection of the occupational distribution that can be
expected locally. The occupational composition of employees in hotels, restaurants, and shops
in the Bay Area, for example, is probably not very different than it is are nationally.
Keyser Marston Associates, Inc.
\\Sf-fs1\wp\12\12062\009\001-003.doc; 6/6/2008
June 2008
Page18
DRAFT
Job descriptions follow the Standard Occupational Classification (SOC) System codes and are
summarized in Appendix Tables 3 to 10. The percentage distribution of employees by major
occupation category is shown on Table 11-2A at the end of this section.
SUMC provided data on the compensation levels of existing employees of SHC and LPCH;
therefore, identification of the occupational structure of the medical center was not a required
intermediate step to determine employee compensation levels. However, as described in
Section III, KMA did review information on SUMC occupational composition as part of a process
to validate the SUMC data.
Step 4 - Estimates of Employee Households Meeting the Lower Income Definitions
This step in the analysis calculates the number of employee households that fall into each income
category for each size household. This calculation is based on employee wage and salary income
distribution and the 2007 income limits for Santa Clara County, as described above.
For the SSC expansion and the non-SUMC providers, employee income distribution is based on
the occupational distribution from Step 3 in combination with recent wage and salary information
from the California Employment Development Department (EDD) for Santa Clara County (see
Appendix Tables 3 through10). For SUMC, the incomes of new employees are based on SUMC
provided data on existing employee incomes (see Appendix Table 11).
Employee income is adjusted to household income assuming that multiple earner households are,
on average, formed of individuals with similar incomes, u.s. census 2000 Transportation Planning
Package data for Santa Clara County on the number of workers in households of various size is
used to make this adjustment. Demographic studies in recent years also confirm the high
probability of people forming households with others of like compensation level, although there is
obviously a significant percent of households that are an exception to this norm.
Wage and salary information is then compared to the HCD income definitions for Santa Clara
County to calculate the number of households that fall into each income category.
Step 5 - Estimate of Household Size Distribution
In this step, household size distribution is input into the model in order to estimate the income
and household size combinations that meet the income definitions established by HUD, as used
by the State and the City. The household size distribution utilized in the analysis is that of Santa
Clara County since the workers are more representativeof the larger universe (the County) than
the City of Palo Alto.
Keyser Marston Associates, Inc.
\\Sf-fsl \wp\l 2\12062\009\001-003.doc; 6/6/2008
June 2008
Page 19
DRAFT
Step 6 - Estimate of Households that meet HUD Size and Income Criteria
For this step We had to build a matrix of household size and income to establish probability factors
for the two-criteria in combination. With the analysis of SSC and the non-SUMC providers, this step
is performed for each occupational category. For analysis of the SUMC data, this step was
performed for each of the $5,000 income increments. In each case a probability factor was
calculated for each of HUD’s income and household size levels and is multiplied by the number of
households.
Table 11-2 B shows the estimated number of households associated with the SSC and non- SUMC
providers in the Very Low Income or under 50% of Median Income Category. It is the output of the
model, after completing Step #4 comparing incomes with the low-income definitions, Step #5
estimating the household size distribution of worker households; and Step #6 which uses this
information to calculate the number of households that fall into each income category. Table 11-2C
shows the results after repeating this methodology for each of the six income tiers.
Table 11-3A presents the distribution of existing SUMC employees for each of the six household
income tiers. It is the output of the model after completed steps #-4, #5, and #6 for existing
employees of SUMC. The distribution is used to estimate the number of new employee households
by income tier as a result of the medical center expansion based on the assumption that existing
employees of the medical center are representative of new employees. The result is presented in
Table 11-3B.
Summary by Income Level
Tables 11-2C indicates the results of the analysis for SSC and the Non-SUMC providers for all
six household income categories and Table 11-3B provides the results for SUMC. The combined
results showing total projected housing demand within commuting distance of Palo Alto, or
number of housing units by affordability level, located somewhere, where a member of the
household works at either SUMC or SCC is summarized in the inset table below.
Number of New
Households
Under 50% AMI
50% to 80% AMI
80% to 100% AMI
100% to 120% AMI
120% to 150% AMI
Subtotal
Over 150% of AMI
Total
Stanford Shopping Center
Retail Restr’nt Hotel
190 169 29
79 28 10
18 3 2
9 1 1
6 1--1-
302 202 43
308 203 44
Total
389
118
23
11
548
555
Stanford University Med Ctr Total
Non-
SHC LPCH SUMC Total
48 31 12 91 480
141 73 13 228 346
87 55 7 149 171
85 58 6 149 161
10___~975 5 190 197
471 293 43 807 1,355
255 224 15 494 501
726 517 58 1,301 1,856
Keyser Marston Associates, Inc.
\\Sf-fs1\wp\12\12062\009\001-003.doc; 6/6/2008
June 2008
Page 20
DRAFT
Table 11-5 and 11-6 provide the result of the analysis in terms of percentage of employee
household falling into each income category.
The analysis finds that total of 1,856 new housing units some where in the region are required
to meet the housing needs generated by the SSC and SUMC projects. Of this new housing
demand, 1,’158 units are for households earning less than 120% of AMI or 1,355 units counting
all households through 150% of AMI. The housing needs are broken out for income tiers
through 150% AMI based on prior KMA work for the City which found that the median priced
home in Palo Alto was not affordable to households ear~ing 150% of median.
The results for SUMC, as might be expected with a medical facility that requires many high
skilled and highly compensated workers, the greatest share of employee households is in the
highest income tier (over 150% AMI). In total, about 64% of SUMC employee households are
over 100% of AMI.
For the Stanford shopping center expansion, 70% of housing demand is in the Very Low income
tier (under 50% of AMI or $53,000 for a four person household). The jobs added with the
shopping center are retail, restaurant and hotel jobs. The finding that many new employee
households are in the lower income tiers is consistent with the generally lower compensation
levels of retail, restaurant, and hotel employees.
An analysis of housing needs as of 2015, an interim year in build of the project, is provided in
Section V. In 2015, the SSC project would be complete, but the medical center would not have
reached full buildout.
Keyser Marston Associatesl Inc.
\\Sf-fsl\wp\l 2\12062\009\001-003odOC; 6/6/2008
June 2008
Page 21
TABLE I1-1
DEVELOPMENT PROGRAM, EMPLOYMENT, AND HOUSEHOLDS - 2025 BUILDOUT
SUMC & SSC EXPANSION - HOUSING NEEDS ANALYSIS
PALO ALTO, CA WORKING DRAFT FOR REVIEW BY STAFF ONLY
Net Added Net Added
Building Net Added Employee
Area"Employment z Households
Stanford University Medical Center Expansion
SHC
LPCH
Non-SUMC Providers
1.72 workers per worker
household
810,000 1,251 726
464,000 891 517
37,OOO 100 58
Stanford Shopping Center Expansion
Retail
Restaurant
Hotel
1,311,000 2,243 1,301
Total
192,000 532
48,000 351
120,000 75
360,000 957
1,671,000 3,200
308
203
44
555
1,856
LPCH = Lucile Packard Children’s Hospital
SHC = Stanford Hospitals and Clinics
SoM = Stanford University School of Medicine
SSC = Stanford Shopping Center
SUMC = Stanford University Medical Center
Notes:
~ See detail Table I - 2.
2 Adjusted for part time employment. See Table I-3.
3 Based on an average number of workers per working household derived from U.S. Census 2000 data for Santa Clara County.
Sources: Stanford University Medical Center and Simon Properties August 2007 - April 2008.
Prepared by: Keyser Marston Associates, Inc.
Filename: \\Sf-fs1\wp\12\12062\009\Nexus model 6-5-08.xls; I1-1 dvlpmt summary; 6/5/2008; dd
TABLE 11-2A
NET NEW HOUSEHOLDS AND OCCUPATION DISTRIBUTION - 2025 BUILDOUT
EMPLOYEE HOUSEHOLDS GENERATED
SUMC & SSC EXPANSION - HOUSING NEEDS ANALYSIS
PALO ALTO, CA
Analysis Using Published Data Sources fo~ Worker Incomes
Retail
Step 1 o Employees 1 532
Step 2 o Adjustment for Number of Households (1.72)3O8
Restaurant
351
203
WORKING DRAFT FOR REVIEW BY STAFF ONLY
Non-SUMC
Hotel Providers
75 100
44 58
Step 3 - Occupation Distribution 2
Management Occupations
Business and Financial Operations
Computer and Mathematical
Architecture and Engineering
Life, Physical, and Social Science
Community and Social Services
Legal
Education, Training, and Library
Arts, Design, Entertainment, Sports, and Media
Healthcare Practitioners and Technical
Healthcare Support
Protective Service
Food Preparation and Serving Related
Building and Grounds Cleaning and Maint.
Personal Care and Service
Sales and Related
Office and Administrative Support
Farming, Fishing, and Forestry
Construction and Extraction
Installation, Maintenance, and Repair
Production
Transportation and Material Moving
Totals
Management Occupations
Business and Financial Operations
Computer and Mathematicat
Architecture and Engineering
Life, Physical, and Social Science
Community and Social Services
Legal
Education, Training, and Library
Arts, Design, Entertainment, Sports, and Media
Healthcare Practitioners and Technical
Healthcare Support
Protective Service
Food Preparation and Serving Related
Building and Grounds Cleaning and Maint.
Personal Care and Service
Sales and Related
Office and Administrative Support
Farming, Fishing, and Forestry
Construction and Extraction
Installation, Maintenance, and Repair
Production
Transportation and Material Moving
Totals
Notes:
1 See Table II - 1
2%2%4%2%
O%0%1%1%
O%O%O%O%
O%O%O%O%
O%O%O%O%
0%0%0%1%
0%0%0%0%
O%O%O%O%
O%O%O%O%
0%0%0%41%
0%0%0%15%
O%O%2%O%
1%94%26%0%
0%0%29%1%
0%0%7%0%
73%2%3%0%
18%1%19%37%
0%0%0%0%
O%O%O%O%
1%0%4%0%
1%O%2%O%
3%1%1%0%
100%100%100%100%
5.6 4.3 1.6 1.3
1.3 0.3 0.6 0.5
0.3 0.0 0.0 0.2
0.0 0.0 0.0 0.0
0.0 0.0 0.0 0.3
0.0 0.0 0.0 0.5
0.0 , 0.0 0.0 0.0
0.4 0.0 0.0 0.0
0.8 0.2 0.1 0.0
0.0 0.0 0,0 24.0
0.0 0.0 0.1 8.8
0.5 0.4 0.9 0.0
1.9 190.8 11.4 .0.0
0.7 1,0 12,8 0.4
0.3 0.1 3,1 0.1
226.4 3.3 1.2 0.1
55.0 1.4 8.1 21.7
0.0 0.0 0.0 0.0
0.0 0.0 0.1 0.0
3.3 0.2 1.9 0.1
3.8 0.5 0.9 0.1
8.1 1.1 0.6 0.0
308.4 203.5 43.5 58.2
2 See Appendix Tables 3 - 10 for additio0al information from which the percentage distributions were derived.
Keyser Marston Associates, Inc.
\\Sf-fs1\wp\12\12062\009\Nexus model 6-5-08.xls; 112-A HH & Ocupations; 6/5/2008; dd
o o
:o
TABLE 11-2C
ANALYSIS SUMMARY - 2025 BUILDOUT
EMPLOYEE HOUSEHOLDS GENERATED
SUMC & SSC EXPANSION - HOUSING NEEDS ANALYSIS
PALO ALTO, CA WORKING DRAFT FOR REVIEW BY STAFF ONLY
Analysis Using Published Data Sources for Worker Incomes
Retail Restaurant
Non-SUMC
Hotel Providers
Number of New Households
Under 50% AMI 190 169 29
50% to 80% AMI 79 28 10
80% to 100% AMI 18 3 2
100% to 120% AMI 9 1 1
120% to 150% AMI 6 1 1
Subtotal through 150% AMI 302 202 43
Over 150% of AMI 6 1 0
Total Employee Households 308 203 44
Percent of New Households
Under 50% AMI 62%83%67%
50% to 80% AMI 26%14%23%
80% to 100% AMI 6%1%4%
100% to 120% AMI 3%0%2%
120% to 150% AMI 2%0%2%
Subtotal through 150% AMI 98%99%,99%
Over 150% of AMI 2%1%1%
Total Employee Households 100%100%100%
12
13
7
6
5
43
15
58
21%
23%
11%
9%
9%
74%
26%
100%
AMI = Area Median Income
Keyser Marston Associates, Inc.
\\Sf-fs1\wp\12\12062\009\Nexus model 6-5-08.xls; 112-C ; 6/5/2008; dd
TABLE 11-3A
COMPENSATION LEVELS OF EXISTING SUMC EMPLOYEES
SUMC & SSC EXPANSION - HOUSING NEEDS ANALYSIS
PALO ALTO, CA
Analysis Using SUMC Data on Worker Compensation
WORKING DRAFT FOR REVIEW BY STAFF ONLY
SHC LPCH
Adjustments for Part Time Employees
Total Employees - SUMC Database
Adjustment Factor 1
Total Adjusted Employees
Nexus Model Output: Existing Employees by
Household Income Level 2
Undei" 50% AMI
50% to 80% AMI
80% to 100% AMI
100% to 120% AMI
120% to 150% AMI
Subtotal through 150% AMI
Over 150% of AMI
Total Existing Employees
Percent of Employee Households
Under 50% AMI
50% to 80% AMI
80% to 100% AMI
100% to 120% AMI
120% to 150% AMI
Over 150% of AMI
Subtotal through 150% AMI
Total Employee Households
Notes:
6,022 2,289
0.9465 0.9015
5,70O 2,064
378 125
1,108 293
685 218
671 233
858 3O0
3,7OO 1,170
2,000 894
5,700 2,064
7%6%
19%14%
12%11%
12%11%
15%,15%
65%57%
35%43%
100%100%
The adjustment factor is designed to count only the portion of employment which is attributable to SUMC based on the assumption that part-time
employees generally have other employment. The adjustment factor weights part time employees based on percentage of a full time schedule. Part-
time employees working up through 65% of full time are adjusted; employees working 65% time or more are not assumed to have another part:time
job and are therefore not adjusted.
See Appendix 11 for additional information from which existing employee income distribution was derived. Employee income has been converted to
household income assuming multiple, earner households are comprised of individuals of similar incomes.
AMI = Area Median Income
Keyser Marston Associates, Inc.
\\Sf-fs1\wp\12\12062\009\Nexus model 6-5-08.xls; 113-A; 6/5/2008; dd
TABLE 11-3B
ANALYSIS SUMMARY - 2025 BUILDOUT (INCREMENTAL)
EMPLOYEE HOUSEHOLDS GENERATED
SUMC & SSC EXPANSION - HOUSING NEEDS ANALYSIS
PALO ALTO, CA WORKING DRAFT FOR REVIEW BY STAFF ONLY
Analysis Using SUMC Data on Worker Compensation
Net New Employees 1
Adjustment for Number of Households
(1.72)
SHC LPCH
1,251 891
726 517
Number of New Households by Based on percentage distribution in Table II - 3 A. Assumes new
Affordability Level employees will have incomes similar to existing employees.
Under 50% AMI 48 31
50% to 80% AMI 141 73
80% to 100% AMI 87 55
100% to 120% AMI 85 58
120% to 150% AMI 109 75
Subtotal through 150% AMI 471 293
Over 150% of AMI 255 224
Total Employee Households .726 517
AMI = Area Median Income
Notes:
1 Adjusted for part time employment. See Table II -1.
Keyser Marston Associates, Inc.
\\Sf-fsl\wp\12\12062\009\Nexus model 6-5-08.xls; 113-B; 6/5/2008; dd
v-~0 03 ~ 0
DRAFT
SECTIONIII-INDEPENDENT RESEARCH ON MEDICAL CENTER EMPLOYMENT
COMPOSITION AND TRENDS
Keyser Marston Associates (KMA) undertook additional independent research to better
understand the composition and characteristics of employment in medical centers such as
Stanford University Medical Center (SUMC). SUMC supplied detailed data on its current
employment base to serve as the basis of the analysis of current and future employees. To
improve our collective understanding of the uniqueness of university medical center
employment and operations and add confidence to the overall analysis and findings, KMA and
the City agreed that it would be helpful for KMA to undertake independent research.
The independent research by KMA consisted of a three pronged effort:
Consultation with individuals and sources about medical center trends, facility design
and staffing. Berkoff Facilities Strategies, consultant to the City of Palo Alto on medical
center facilities planning, was particularly helpful.
Comparison of Stanford staffing and compensation levels with a comparable facility.
The University of California San Francisco Medical Center was selected as the most
comparable for which at least some data was accessible.
3.Comparison of data provided to KMA by SUMC and the compensation levels negotiated
in contracts with labor unions representing employees of SUMC including the Service
Employees International Union (SEIU), and Committee for Recognition of Nursing
Achievement (CRONA).
SUMC as a Unique Facility
One of the challenging aspects for people trying to analyze and understand the SUMC facility
and its rebuilding and expansion proposal, is the uniqueness of medical centers in general and
a university teaching hospital center in particular. Members of the Palo Alto community - City
staff, elected representatives and concerned citizens - as well as consultants that are not
medical center specialists all have a need to understand that medical centers are unique
facilities, and that academic teaching hospital are a highly specialized subset of the medical
center health care provider world.
KMA has worked on other recent hospital and medical center projects and analysis of
employment and housing needs. Through our prior work KMA has become familiar with hospital
employment and arrangements. For example, most medical centers and hospitals have their
own staff which must be distinguished from the doctors who practice there and have their own
separate staff, usually off-site. In addition, there is a range of various contracted services that
hospitals often use in lieu of direct employees to meet their needs. Drawing from prior
Keyser Marston Associates, Inc.
\\Sf-fs1\wp\12\12062\009\001-003.doc; 6/6/2008
June 2008
Page 30
DRAFT
experience, KMA was able to probe and clarify the role of on site workers, doctors who practice
at SUMC and their staff, how nursing is staffed in hospitals today, and the role of the various
contracted services.
Over the course of the work program, KMA sought to understand how university teaching
hospitals differ from other hospitals, such as community hospitals and how ultimately .these
differences affect the employment profile. Among the characteristlcs that distinguish teaching
hospitals such as SUMC, we note a few examples:
The higher level of "Tertiary Care’.’ as compared to community hospitals. Teaching
hospitals and medical centers are centers of specialists in contrast to the more general
levels of specialization provided at Primary and Secondary care facilities. Often patients
are sent from other hospitals that lack the ultra high specialization that may exist only in
a few hospitals in any given region, or even the whole country.
The provision of "Quaternary Care" or advanced levels of medicine that is sometimes
experimental or very rarely used. Quarternary care is highly complex, complicated and
typically requires a multi disciplinary approach.
Hospitals that provide a high level of tertiary care treat patients at a "higher acuity" level.
This translates to a higher level of education and skill in all areas of patient care from
food preparation and housecleaning, to administering what are otherwise routine
procedures such as stringing up an intravenous feeding, to surgical procedures. Many
patients have "co-morbidity" and intensively critical healthcare needs.
Medical centers such as SUMC make the greatest use of diagnostic and other state of
the art technical equipment. All such equipment requires an extraordinary level of skilled
technicians to employ the equipment and interpret results, etc.
An academic medical center such as SUMC differs from a community hospital in its
research and education mission. The result is that specialist researchers and others are
often added to teams resulting in both higher staffing and skill levels on average.
For employment, a university teaching hospital translates to higher skill levels in most all jobs
and the higher compensation levelsthat accompany the skill set, particularly when compared to
community hospitals and medical centers.
Comparison to UCSF
Recognizing the uniqueness of SUMC as an academic teaching hospital, KMA and City staff
selected the academic teaching medical center of the University of California in San Francisco
(UCSF) as the best medical center for comparing staffing and compensation levels. It was
Keyser Marston Associates, Inc.
\\Sf-fs1\wp\12\12062\009\001-003. doc; 6/6/2008
June 2008
Page 31
DRAFT
important to use for comparison purposes a medical center of similar stature and also one in a
similar labor market area. UCSF was deemed the best medical center for meeting the
comparison criteria.
To accomplish the comparison, KMA obtained the University of California payroll data base for
Fiscal Year 2006-07 available through the University of California library. Data on UCSF
employees including job description and compensation levels were extracted from the database.
Medical center employees were separated out from the universe of UCSF employees by cross
referencing the payroll database with the UCSF.employee directory. This step was required to
exclude facilities at UCSF which are not part of the medical center. The UCSF medical center
data was then input into the KMAjobs housing model using the same household size and
income limits as in the SUMC analysis.
The conclusion of the comparison with UCSF was that although there were differences, the
differences were not substantial. The comparison analysis for UCSF produced similar results
and added a further level of confidence to the analysis results for SUMC.
Labor Union Contract Comparisons
To provide another due diligence type check on the SUMC provided data on the compensation
level of its employees, KMA obtained copies of contracts negotiated between SUMC and two
labor organizations. The Service Employees International Union (SEIU) was of particular
interest because it covers a broad range of the lower paying type jobs within the medical center.
The Committee for Recognition of Nursing Achievement or CRONA was also of interest
because it covers nurses.
The agreements allowed a comparison of certain positions in both SEIU and CRONA type jobs
and the compensation range negotiated and the SUMC compensation. The SEIU and CRONA
agreements were for hourly compensation which had to be converted to annual and compared
to the SUMC data without overtime and bonus adjustments.
SUMC provided a second set of compensation data keyed to the general occupational Category
of employees which allowed for the comparison to union contract pay rates. This second data
set provided broad annualized base compensation ranges excluding over time, bonuses, or
"shift differential" (add on to hourly pay rates for evening, weekend, holiday shifts). The primary
compensation data set used in the analysis did not identify compensation by occupation and so
could not be used for this purpose. A reconciliation of the two SUMC data .sets was performed
to confirm consistency.
Again, the information from the two labor contracts generally confirmed the information provided
by SUMC for compensation levels of many positions.
Keyser Marston Associates, Inc.
\\Sf-fs 1\wp\12\12062\009\001-003.doc; 6/6/2008
June 2008
Page 32
DRAFT
KMA also obtained contract pay levels for the UCSF medical center and compared minimum
contractpay rates at UCSF and SUMC. The comparison required KMA to match job
classifications in the union contracts based on job description. The primary purpose of this
comparison was to verify that pay rates at the respective institutions were reasonably
comparable. The comparison of jobs housing model results using UCSF data described in the
previous section is only useful as a confirmation / verification if pay rates are reasonably similar.
We found contract pay levels at UCSF to be consistently less than SUMC but within a close
enough range for the jobs housing model results comparison to be valid and informative.
Part Time Employment Sensitivity Analysis
One of the subjects that generated considerable attention is the analytical treatment of the part
time workers at SUMC. As indicated previously, SUMC has no way of knowing, nor does any
employer typically know the extent to which their part time workers hold other jobs. The
research by governmental agencies on this subject is also deficient for the purposes of this
housing needs analysis.
The assumption with respect to part time workers holding other jobs influences the analysis
results in two major ways. First, the total number of employees and employee households
attributable to the project is affected. If a worker is employed 50% at SUMC and 50%
elsewhere, then only 50% of the employee’s housing impact is rightfully attributable to SUMC.
Second, the income of the employee and his/her employee household is affected by whether
the employee holds a second job. As a result the household income and affordability level is
affected.
To assist the City in understanding the impact of alternative assumptions with respect to part
time employment on results of the housing needs assessment analysis, KMA conducted a
sensitivity analysis. The sensitivity analysis was conducted using three alternative assumptions:
1) all part time workers hold other jobs up to the level of full time employment; 2) none of the
part time worker hold other jobs; and 3) only employees working less than 70% time hold part
time jobs.
Part Time Workers at SUMC
There are approximately 3,300 part time employees at SUMC. We know that some part time
employees at all percentages have other employment and some do not, but we lack information
on the break out on average, or by percentage level. The distribution of existing SUMC
employees by portion of a full time schedule is shown below.
Keyser Marston Associates, Inc.
\\Sf-fsl\wp\l 2\12062\009\001-003.doc; 6/6/2008
June 2008
Page 33
DRAFT
Portion of Full Time Schedule
Less Than 70%
20%
3O%
5O%
6O%, 63%
Subtotal
70% or More
70%, 75%
80%, 85%, 88%
90%, 95%
Subtotal
Full Time
No. Employees
56
98
434
543
1,131
332
446
2,180
5,000
Total 8,311
Mid Range Analysis Assumption:
The midrange analysis assumption is that employees working less than 70% of a full time
schedule have other employment. Incomes for these employees are adjusted upward to a full
time schedule assuming other employment at approximately the same pay level as SUMC.
Consistent with the assumption of other employment, only a proportionate share of housing
demand is allocated to the project.
Employees working 70% of a full time schedule or more are not assumed to have other
employment. Incomes of these workers are based solely on’compensation data provided by
SUMC with no other sources of income assumed. Housing demand is not adjusted downward
since it is assumed to have been generated solely by SUMC.
The 70% threshold selected by KMA is designed to recognize that not all part time employees
supplement their income at SUMC with other employment.
This approach is supported by statements by SUMC that employees classified as 90% time
typically work a full-time schedule. Since these employees are effectively full time, it does not
make sense to make a further adjustment. Compensation data provided by SUMC includes the,
total compensation for these workers and recognizes the actual hours worked.
Sensitivity Test
The first sensitivity test proceeds with the assumption that all part time employees have other
employment. For purposes of this sensitivity test we have assumed all employees have other
employment (including those classified as 90% time which may already be effectively full time).
Keyser Marston Associates, Inc.
\\Sf-fsl \wp\12\12062\009\001-003.doc; 6/6/2008
June 2008
Page 34
DRAFT
The total number of households is reduced with this approach because all employees are
counted proportionately based on the percentage of a full time schedule.
To bracket the other end of the range of potential assumptions regarding part time workers, we
tested the analysis assuming none of the part time workers have other employment. With this
approach, compensation and employment data provided by SUMC is used with no adjustments.
The total number of households increases because all employees are counted regardless of the
portion of a full time schedule worked.
The range of potential outputs with alternative treatments of part time workers is bracketed by
columns B and C on the attached table. The selected approach (column A) is between the two
extremes.
Future Employment Profile
One key assumption agreed to by both SUMC and KMA that is fundamental to the analysis is
that the composition of employment in the future will be similar to the composition of today. By
composition of employment, the implication is same job descriptions and same compensation
levels for the jobs. All evidence suggests that there will, indeed, be substantial changes.
However, lacking any solid foundation with which to project the changes, all parties agreed that
the best way to project the future would be as an extension of today. This is probably a
conservative assumption as the trend in health care is for higher levels of specialization and use
of technology which usually translates to higher skill levels and compensation of employees.
Keyser Marston Associates, I nc,
\\Sf-fs1\wp\12\12062\009\001-003.doc; 6/6/2008
June 2008
Page 35
d
~0
0 >Z ~
DRAFT
SECTION IV - UNDERLYING CONCEPTS AND ASSUMPTIONS
This section provides supporting material for the analysis in terms of clarifying some of the
underlying concepts in the linking of new development projects, new jobs and housing needs.
The following topics are drawn from jobs housing linkage reports and apply to the Stanford
expansion project analysis of housing needs as well.
The Relationship between Job Growth and Population Growth
An underlying assumption here is that job growth is the major driver of population growth for
regions and subregions within the United States.
New population growth in most U.S. regions occurs primarily as a result of job growth. Over the
long term, the vast majority of growth in the State of California and its sub-regions is job driven.
The arrival of new population creates "secondary" demand for jobs in retail outlets and services
that follow. Growth in the greater Bay Area and particularly in Silicon Valley is predominantly job
driven. Most people coming to the region would not come if they could not expect to find a job,
notwithstanding short-term economic cycles. People born in the local area would not stay without
jobs. In the short-term, economic cycles and other factors can result in population growth without
jobs to support the growth. If an economic region in the U.S. does not maintain job growth, there is
an out-migration to regions where job growth is occurring. Many cities in the Midwest during the
70’s and 80’s are examples.
At the lower income levels, relocation and migration are particularly job driven. No housing is
affordable to lower income groups without jobs (or without public assistance).
The Relationship between Construction and Job Growth
If population growth, especially lower income population, is predominantly job driven in the
greater Bay Area, the question arises as to the source or "cause" of employment growth itself.
Simplistically we can say that employment growth does not have "one cause." Many factors
underlie the reasons for growth in employment in a given region; these factors are complex,
interrelated, and often associated with forces at the national or even international level. One of
the factors is the delivery of new workspace buildings. The argument does not make the case
that the construction of new buildings is solely responsible for growth. However, especially in
the Bay Area, new construction is uniquely important, first, as one of a number of parallel factors ¯
contributing to growth, and secon.d, as a unique and essential condition precedent to growth.
Workplace buildings bear a special relationship to growth, different from other parallel causes, in
that buildings are a condition precedent to growth. Job growth does not occur in modern service
economies without buildings to house new workers. Unlike other factors that are responsible for
growth, buildings play the additional unique role that growth cannot occur without them. Job
intensification within a given space will occur in the short term, but in the longer term will become
Keyser Marston Associates, Inc.
\\Sf-fsl \wp\l 2\12062\009\001-003.doc; 6/6/2008
June 2008
Page 37
DRAFT
unacceptable and warrant a larger space. Conversely, it is well established that the inability to
construct new workplace buildings will constrain or even halt job growth.
KMA has prepared many jobs housing analyses that demonstrate the relationship between new
building construction and employment growth. These analyses confirm that over a past time frame,
usually ten to fifteen years, the square feet of new workspace building within a jurisdiction is directly
linked to growth in employment in the jurisdiction. That is to say the 3,200 net new jobs associated
with the Stanford expansion projects will occur if and only if the projects are constructed. The
expansion projects are a condition precedent to the projected job growth and the associated
demand for housing.
Substitution Factor
Any given new building may be occupied partly, or even perhaps totally, by employees relocating
from elsewhere within the city or the Bay Area. Buildings are often leased entirely to firms
relocating from other buildings in the same jurisdiction. However, when a firm relocates to a new
building from elsewhere in the region, there is space in an existing building that is vacated and
released to another firm. That building in turn may be filled by some combination of newcomers to"
the area and existing residents. Somewhere in the chain there are jobs new to the region. The net
effect is that new buildings bring in new employees, although not necessarily inside of the new
buildings themselves.
Indirect Employment and Multipliers
The housing needs analysis does not count all potential employment growth associated with the
expansion projects. For starters, all employment associated with the construction and development
of the expansions is not included in this analysis.
An analysis of this type typically addresses direct employment only. In the case of an office
building, for example, direct employment covers the various managerial, professional and clerical
people that work in the building; it does not include the janitorial workers, the window washers, the
security guards, the delivery services, the landscape maintenance workers, and the many others
that are associated with the normal functioning of an office building. Many of these indirect
employees are service workers at the lower end of the pay scale.
In the case of the proposed expansions, the above generalization with respect to direct
employment resulting in an undercount may be more applicable to the shopping center expansion
than to SUMC. SUMC is purported to be a separate entity that includes many employees that
might ordinarily be considered indirect, such as building and landscape maintenance staff. On the
other hand, the SUMC expansion, by its very size and nature, will inevitably result in ancillary jobs
for contracted services and other specialized needs.
The analysis contained herein does not include other types of indirect employment and multipliers.
For example, the hospitals will be making major purchases of supplies, food, equipment,
Keyser Marston Associates, Inc.
\\Sf-fs1\wp\12\12062\009\001-003.doc; 6/6/2008
June 2008
Page 38
DRAFT
pharmaceuticals, etc. that all entail additional employment. Multipliers refer to the concept that the
income generated by certain types of jobs recycles through the economy resulting in additional
jobs. This study omits such multiplier effects.
Analysis Assumptions - Potential Over and Understating of Results
The following items are technical assumptions that are incorporated into the model operations.
Certain assumptions will tend to overstate or understate the number of households at the lower
end of the affordability spectrum, but on balance produce a reasonable estimate given the
information available.
Factors that could result in an overstatement of the number of households at the lower-income
end of the spectrum are as follows:
Data on the number of workers per household does not differentiate between
households formed of low-income workers and high-income workers. In reality, lower-
income workers may be more likely to live in multiple earner, households. As a practical
response to high housing costs, single low-income workers may be more likely to live
with roommates. For lower-income couples, the propensity for both partners to work may
be higher in response to the need to cover housing and Other expenses.
Since the San Francisco Peninsula and Silicon Valley are such high cost areas for
housing, the propensity for households to have multiple earners stretches farther up the
income spectrum than in less costly areas. The 1.72 workers per worker household
average for Santa Clara County is higher than most counties and reflects the need for
multiple incomes. The KMA jobs housing model does, utilize U.S. Census based
differentiation of workers per worker household by household size but not by income
level, and as a result some distortion may result.
The analysis assumes dual income households are formed of workers that have similar
income. In estimating household income, the income of a low-income worker is combined
with the income of another low-income worker (and likewise, middle-income workers are
combined and upper income workers are combined). For households formed from a
combination of a low-income worker and a high-income worker, this assumption would
underestimate total household income for the low-income worker and overestimate
household income for the high-income worker.
The factors that will tend to result in an understatement of total and lower-end housing demand
or an overstatement of the number of households at the higher-income end of the spectrum are
as follows:
1.No Census or other hard data was available enabling a differentiation between the
household size composition of workers by occupation. Anecdotally one can observe that
Keyser Marston Associates, Inc.
\\Sf-fsl\wp\l 2\12062\009\001-003. doc; 6/6/2008
June 2008
Page 39
DRAFT
there are probably some significant differences between the households of service workers
and highly paid profes.sionals.
2. Only direct employees are counted in the analysis.
In summary, several assumptions will tend to overstate the number of households falling into
the low-income categories while others either tend to understate total housing demand or
overstate the number of households in the higher income categories. Despite these intricacies,
we believe our assumptions yield a reasonable and best estimate of housing demand by income
category given the limits of available data.
Keyser Marston Associates, I nc,
\\Sf-fs 1\wp\12\12062\009\001-003.doc; 6/6/2008
June 2008
Page 40
DRAFT
SECTION V - INTERIM TIME HORIZON ANALYSIS RESULTS
This section provides a data set of the analysis and conclusions for an interim time horizon, or
the year 2015, for use in the environmental impact documentation. The EIR will address impacts
at the 2015 year as well as buildout at 2025. The KMA analysis contained in the prior sections
of the report are all 2025; this section contains parallel information for 2015.
Employment Growth by 2015
By 2015 most of the SUMC building program will have been completed and the Shopping
Center component will likely have been completed many years before.
For SUMC employment in 2015, City staff and SUMC agreed that the best assumption is that
most employment growth will have occurred even if some replacement buildings will not have
been completed by this time. Table V-1 presents the levels of employment associated with the
major SUMC components and the Shopping Center. As indicated approximately 78% of the
growth in employment in SHC will have occurred by 2015, and 95% of the growth in LPHC. The-
reconstruction of the space affecting the Non-SUMC providers, or the employees in the for
lease space owned by SUMC, will have been completed by 2015.
The adjustments for part time are per the discussion in Section I of this report, and reflect the
KMA mid range assumption that all employees under 70% time are assumed to hold other jobs.
The Shopping Center figures for 2015 are the same as buildout.
Analysis Results
Employment growth is the starting point of the jobs housing analysis detailed in Section II of this
report. All inputs and assumptions of the analysis are unchanged for the 2015 analysis; only the
starting point employment figure is different.
The results of the analysis, expressed in number of households associated with the expansion
projects, is summarized in Table V-1.
The percent distribution by income level for the two hospitals is the same as in the 2025 build
out version. Totals for the combined projects, however, differ because the Non SUMC Provider
portion and the Shopping Center represents a larger share of the total mix.
Keyser Marston Associates, Inc.
\\Sf-fst \wp\l 2\12062\009\001-003.doc; 6/6/2008
.June 2008
Page 41
0 (~1 x’- 0 03
TABLE V-2
DEVELOPMENT PROGRAM, EMPLOYMENT, AND HOUSEHOLDS - 2015
SUMC & SSC EXPANSION - HOUSING NEEDS ANALYSIS
PALO ALTO, CA WORKING DRAFT FOR REVIEW BY STAFF ONLY
Net Added
Net Added Employee
Employment 1 Households
1.72 workers per worker
household
.Stanford University Medical Center Expansion
SHC 979 568
LPCH 850 493
Non-SUMC Providers 100 58
1,929 1,119
Stanford Shopping Center Expansion
Retail 532 308
Restaurant 351 203
Hotel 75 44
Total
957
2,886
555
1,674
LPCH = Lucile Packard Children’s Hospital
SHC = Stanford Hospitals and Clinics
SoM = Stanford University School of Medicine
SSC = Stanford Shopping Center
SUMC = Stanford University Medical Center
Notes:
1 Adjusted for part time employment. See detail Table I-3.
2 Based on an average number of workers per working household derived from U.S. Census 2000 data for Santa Clara County.
Sources: Stanford University Medical Center and Simon Properties August 2007 - April 2008.
Prepared by: Keyser Marston Associates, Inc.
Filename: \\Sf-fsl\wp\12\12062\009\Nexus model 6-5-08.xls; V-2 dvlpmt summary; 6/5/2008; dd
O0 03 O) O0 0 ~ £0 0
0 ~ ~
03 ~f v- 0 0O0 ~--
~v--00")0
O0 ~ 0
APPENDIX TABLES
APPENDIX TABLE 1
INCOME LIMITS
SUMC & SSC EXPANSION - HOUSING NEEDS ANALYSIS
PALO ALTO, CA WORKING DRAFT FOR REVIEW BY STAFF ONLY
Household Size
1-person 2-person 3-person 4-person 5-person 6 + person
Household Income Limit
50% of AMI $37,150 $42,450 $47,~50 $53,050 $57,300 $61,550
80% of AMI $59,400 $67,900 $76,400 $84,900 $91,650 $98,450
100% of AMI $73,900 $84,400 $95,000 $105,500 $113,900 $122,400
120% of AMI $88,600 $101,300 $113,900 $126,600 $136,700 $146,900
150% of AMI $110,900 $126,600 $142,500 $158,300 $170,900 $183,600
AMI = Area Median Income, Santa Clara County 2007.
Source: California Department of Housing and Community DeveLoPment FY 2007 Income Limits for Santa Clam County
Keyser Marston Associates, Inc.
\\Sf-fsl \wp\12\12062\009\Nexus model 6-5-08.xls; AP 1 Income Limits; 6/5/2008; dd
APPENDIX TABLE 2
ADJUSTMENT TO SUMC EMPLOYMENT FIGURES PROVIDED IN APPLICATION MATERIALS
SUMC & SSC EXPANSION - HOUSING NEEDS ANALYSIS
PALO ALTO, CA WORKING DRAFT FOR REVIEW BY STAFF ONLY
1. Employment On and Off Campus in 2006
.a.
Total Note
SUMC Application Materials (Table 5-2)
SHC 6,490
LPCH 2,475.
Total 8,965
With double counting of employees and
without including temporary and contract
employees. Per SUMC, existing
employment counts are overstated due to
double counting of employees that have
been terminated and then replaced. Contract
and temporary employees are not included.
Adjusted to remove double counting, add contract / temp positions
SHC - payroll data - no double counting 6,022
LPCH - payroll data - no double counting 2,289
Subtotal - payroll data 8,311
Temp positions excluded from payroll data
Total 2006 employment
41--0
8,721
No double counting of employees and
including temporary and contract
employees. SUMC has indicated that
double counting was eliminated in payroll
data provided by SUMC. The number of
temporary and contract positions has been
provided.
c. Adjustment Percentage
2. Employment on Campus in 2007
orsay:
2.7%
3%
SUMC Application Materials (Table 5-2)
SHC 5,402
LPCH 1,7t8
Total 7,120
b. Adjusted @3%
SHC 5,240
LPCH 1,666
Total 6,906
With double counting of employees and
without temporary and contract employees.
With removal of estimated double counting
and including temporary and contract
Note: SUMC has indicated that future employment estimates will not change as a result of the above adjustments.
Sources: Stanford University Medical Center August 2007 - April 2008.
Keyser Marston Associates, Inc.
\\Sf-fs1\wp\12\12062\009\Nexus model 6-5-08.xls; AP 2 Existing Dbl count; 6/5/2008
APPENDIX TABLE 3
2006 NATIONAL RESTAURANT WORKER DISTRIBUTION BY OCCUPATION
SUMC & SSC EXPANSION - HOUSING NEEDS ANALYSIS
CITY OF PALO ALTO, CA " DRAFT FOR DISCUSSION WITH STAFF ONLY
Major Occupations (1% or more)
Management occupations
Food preparation and serving related occupations
Sales and related occupations
All Other Restaurant Related Occupations
INDUSTRYTOTAL
2006 National
Restaurant Industry
Occupation Distribution
92,250 2.1%
4,104,910 93.8%
70,190 1.6%
110 O80 2.5%
4,377,430 100.0%
Source: Bureau of Labor Statistics
Prepared by: Keyser Marston Associates, Inc.
Filename: \\Sf-fsl\wp\12\12062\009\SCC-Restaurant 6-5-08.xls; Major Occupations Matrix; 6/5/2008; dd
APPENDIX TABLE 4
AVERAGE ANNUAL COMPENSATION, 2007
RESTAURANT WORKER OCCUPATIONS
SUMC & SSC EXPANSION-- HOUSING NEEDS ANALYSIS
CITY OF PALO ALTO, CA
Occupation
DRAFT FOR DISCUSSION WITH STAFF ONLY
% of Total % of Total
2007 Avg.Occupation Restaurant
Compensation z Group 3 Workers
Management occupations
Chief executives
General and operations managers
Food service managers
All Other Management occupations (Avg. All Categories)
Weighted Mean Annual Wage
$145,600 4 2.6%0.1%
$134,400 25.8%0.5%
$49,300 67.4%1.4%
$130,400 4.2%0.1%
$77,200 100.0%2.1%
Food preparation and serving related occupations
First-line supervisors/managers of food preparation and serving workers
Cooks, restaurant
Cooks, short order
Food preparation workers
Bartenders
Combined food preparation and serving workers, including fast food
Waiters and waitresses
Dining room and cafeteria attendants and bartender helpers
Dishwashers
Hosts and hostesses, restaurant, lounge, and coffee shop
Al! Other Food preparation and serving related occupations (Avg. All Categories)
Weighted Mean Annual Wage
Sales and related occupations
First-line supervisors/managers of retail sales workers
Cashiers
Retail salespersons
All Other Sales and related occupations (Avg. All Categories)
Weighted Mean Annual Wage
$29 300
$23 2OO
$24 300
$20 900
$19 600
$19 600
$18 800
$18 000
$17 900
$19 200
$20,300
4.7%4.4%
15.8%14.8%
2.0%1.9%
5.1%4.8%
4.5%4.2%
3.2%3.0%
41.2%38.6%
5.3%&0%
7.8%7.3%
,6.9%6.4%
3.6%3.4%
100.0%93.8%
$44,100 3.0%0.0%
$23,400 90.5%1.5%
$27,800 4.5%0.1%
$51,700 2.0%0.0%
$24,800 100.0%1.6%
97.5%
1 Including occupations representing 2% or more of the major occupation group
2 The methodology utilized by the California Employment Development Department (EDD) assumes that hourly paid employees are employed full-time.
Annual compensation is calculated by EDD by multiplying hourly wages by 40 hours per work week by 52 weeks.
3 Occupation percentages are based on the 2006 National Industry - Specific Occupational Employment survey compiled by the Bureau of Labor Statistics.
Wages are based on the 2006 Occupational Employment Survey data for San Jose-Sunnyvale-Santa Clara, CA MSA (Santa Clara and San Benito
Counties) updated by the California Employment Development Department to 2007 wage levels.
4 EDD data indicates average compensation above $145,600 per year for this occupation but does not provide estimates when average compensation levels
exceed this threshold.
Source: Bureau of Labor Statistics; California Employment Development Department
Prepared by: Keyser Marston Associates, Inc.
Filename: \\Sf-fsl\wp\12\12062\009\SCC-Restaurant 6-5-08.xls; Compensation; 6/5/2008; dd
APPENDIX TABLE 5
2006 NATIONAL RETAIL WORKER DISTRIBUTION BY OCCUPATION
SUMC & SSC EXPANSION - HOUSING NEEDS ANALYSIS
CITY OF PALO ALTO, CA DRAFT FOR DISCUSSION WITH STAFF ONLY
Major Occupations (1.5% or more)
Management occupations
Sales and related occupations
Office and administrative support occupations
Transportation and material moving occupations
All Other Retail Related Occupations
INDUSTRY TOTAL
2006 National
Retail Industry
Occupation Distribution
6O,940 1.8%
2,474,980 73.4%
600,920 17.8%
89,090 2.6%
145 720 4.3%
3,371,650 100.0%
Source: Bureau of Labor Statistics
Prepared by: Keyser Marston Associates, Inc.
Filename: \\Sf-fs1\wp\12\12062\009\SCC-Retail 6-5-08.xls; Major Occupations Matrix; 6/5/2008; dd
APPENDIX TABLE 6
AVERAGE ANNUAL COMPENSATION, 2007
RETAIL WORKER OCCUPATIONS
SUMC & SSC EXPANSION - HOUSING NEEDS ANALYSIS
CITY OF PALO ALTO, CA
Occupation
DRAFT FOR DISCUSSION WITH STAFF ONLY
% of Total % of Total
2007 Avg.Occupation Retail
Compensation z Group =Workers
Management occupations
Chief executives
General and operations managers
Sales managers
Managers, all other
All Other Management occupations (Avg. All Categories)
Weighted Mean Annual Wage
$145,600 4 2.1%0.0%
$134,400 62.2%1.1%
$144,100 22.1%0.4%
$134,300 5.5%0.1%
$~30.400 8.1%0.1%
$136,400 100.0%1.8%
Sales and related occupations
First-line supervisors/managers of retail sales workers
Cashiers
Retail salespersons
All Other Sales and related occupations (Avg. All Categories)
Weighted Mean Annual Wage
$44,100 10.9%8.0%
$23,400 18.5%13.6%
$27,800 69.5%51.0%
$51.700 1.1%.0.8%
$29,000 100.0%73.4%
Office and administrative support occupations
Bookkeeping, accounting, and auditing clerks
Customer service representatives
Shipping, receiving, and traffic clerks
Stock clerks and order fillers
Office clerks, general
All Other Office and administrative support occupations (Avg. All Categories)
Weighted Mean Annual Wage
$41,800 4.6%0.8%
$45,700 6.1%1.1%
$33,800 8.5%1.5%
$27,600 59.2%10.5%
$33,800 4,2%0.7%
$40,8O0 17.5%3.1%
$32,400 100.0%17.8%
Transportation and material moving occupations
First-line supervis0rs/managers of helpers, laborers, and material movers, hand
Truck drivers, light or delivery.services
Laborers and freight, stock, and material movers, hand
(blank)
All Other Transportation and material moving occupations (Avg. All Categories)
Weighted Mean Annual Wage
$43,200 3.0%0.1%
$30,100 3.2%0.1%
$25,400 13.1%0.3%
$21,500 8.2%0.2%
$31.200 72.5%1.9%
$30,000 100.0%2.6%
95.7%
oIncluding occupations representing 2 Yo or more of the major occupation group
The methodology utilized by the California Employment Development Department (EDD) assumes that hourly paid employees are employed full-time.
Annual compensation is calculated by EDD by multiplying hourly wages by 40 hours per work week by 52 weeks.
Occupation percentages are based on the 2006 National Industry - Specific Occupational Employment survey compiled by the Bureau of Labor Statistics.
Wages are based on the 2006 Occupational Employment Survey data for San Jose-Sunnyvale-Santa Clara, CA MSA (Santa Clara and San Benito
Counties) updated by the California Employment Development Department to 2007 wage levels.
EDD data indicates average compensation above $145,600 per year for this occupation but does not provide estimates when average compensation levels
exceed this threshold.
Source: Bureau of Labor Statistics; California Employment Development Department
Prepared by: Keyser Marston Associates, Inc.
Filename: \\Sf-fs1\wp\12\12062\009\SCC-Retail 6-5-08.xls; Compensation; 6/5/2008; dd
APPENDIX TABLE 7
2006 NATIONAL HOTEL WORKER DISTRIBUTION BY OCCUPATION
SUMC & SSC EXPANSION - HOUSING NEEDS ANALYSIS
CITY OF PALO ALTO, CA DRAFT FOR DISCUSSION WITH STAFF ONLY
Major Occupations (4% or more)
Food preparation and serving related occupations
Building and grounds cleaning and maintenance occupations
Personal care and service occupations
Office and administrative support occupations
Installation, maintenance, and repair occupations
All Other Hotel Related Occupations
INDUSTRY TOTAL
2006 National
Hotel Industry
Occupation Distribution
456,730 26.2%
512,480 29.4%
123,870 7.1%
326,280 18. 7%
74,740 4.3%
250 250 14.3°./o.
1,744,350 100.0%
Source: Bureau of Labor Statistics
Prepared by: Keyser Marston Associates, Inc.
Filename: \\Sf-fs1\wp\12\12062\009\SCC-Hotel 6-5-08.xls; Major Occupations Matrix; 6/5/2008; dd
APPENDIX TABLE 8
AVERAGE ANNUAL COMPENSATION, 2007
HOTEL WORKER OCCUPATIONS
SUMC & SSC EXPANSION- HOUSING NEEDS ANALYSIS
CITY OF PALO ALTO, CA
Occupation
DRAFT FOR DISCUSSION WITH STAFF ONLY
% of Total % of Total
2007 Avg.Occupation Hotel
Compensation ~Group ~Workers
Page I of 2
Food preparation and serving related occupations
First-line supervisors/managers of food preparation and serving workers
Cooks, restaurant
Food preparation workers
Bartenders
Combined food preparation and serving workers, including fast food
Waiters and waitresses
Food servers, nonrestaurant
Dining room and cafeteria attendants and bartender helpers
Dishwashers
Hosts and hostesses, restaurant, lounge, and coffee shop
All Other Food preparation and serving related occupations (Avg. All Categories)
Weighted Mean Annual Wage
$29,300 5.0%1.3%
$23,200 12.2%3.2%
$20,900 4.3%1.1%
$19,600 7.8%2.0%
$19,600 4.0%1.1%
$18,800 28.4%7.4%
$23,100 8.9%2.3%
$18,000 10.0%2.6%
$17,900 7.1%1.9%
$19,200 4.1%1.1%
~8.3%2.2%
$20,500 100.0%26.2%
Building and grounds cleaning and maintenance occupations
First-line supervisors/managers of housekeeping and janitorial workers
Janitors and cleaners, except maids and housekeeping cleaners
Maids and housekeeping cleaners
Landscaping and groundskeeping workers
All Other Building and grounds cleaning and maintenance occupations (Avg. All Cat~
Weighted Mean Annual Wage ’
$40,800 6.0%1.8%
$25,000 9.6%2.8%
$24,500 80.5%23.7%
$29,400 3.1%0.9%
$27,300 0.8%0.2%
$25, 700 100;0%29.4%
Personal care and service occupations
Baggage porters and bellhops
Concierges
Recreation workers
Personal care and service workers, all other
All Other Personal care and service occupations (Avg. All Categories)
Weighted Mean Annual Wage
$21,600 19.9%1.4%
$27,800 6.4%0.5%
$29,900 3.2%0.2%
$26,200 3.5%0.2%
$29800 66.9%4.8%
$27,900 100.0%7.1%
Office and administrative support occupations
First-line supervisors/managers of office and administrative support workers
Bookkeeping, accounting, and auditing Clerks
Hotel, motel, and resort desk clerks
Reservation and transportation ticket agents and travel clerks
All Other Office and administrative support occupations (Avg. All Categories)
Weighted Mean Annual Wage
$59,000 7.1%1.3%
$41,800 6.7%1.3%
$24,300 61.3%11.5%
$31,500 3.8%0.7%
$40,80O 21.2%4.0%
$31,700 100.0%18.7%
Sources: Bureau of Labor Statistics; California Employment Development Department
Prepared by: Keyser Marston Associates, Inc.
Filename: \\Sf-fs1\wp\12\12062\009\SCC-Hotel 6-5-08.xls; Compensation; 6/5/2008; dd
Occupation
% of Total % of Total
2007 Avg.Occupation Hotel
Compensation z Group 3 Workers
Page 2 of 2
Installation, maintenance, and repair occupations
First-line supervisors/managers of mechanics, installers, and repairers
Maintenance and repair workers, general
All Other Installation, maintenance, and repair occupations (Avg. All Categories)
Weighted Mean Annual Wage
$73,100 8.1%0.3%
$44,300 84.8%3.6%
$50,O00 7.1%O.3%
$47,000 100.0%4.3%
85.7%
Including occupations representing 3% or more Of the major occupation group
The methodology utilized by the California Employment Development Department (EDD) assumes that hourly paid employees are employed full-time.
Annual compensation is calculated by EDD by multiplying hourly wages by 40 hours per work week by 52 weeks.
Occupation percentages are based on the 2006 National Industry - Specific Occupational Employment survey compiled by the Bureau of Labor Statistics.
Wages are based on the 2006 Occupational Employment Survey data for San Jose-Sunnyvale-Santa Clara, CA MSA (Santa Clara and San Benito
Counties) updated by the California Employment Development Department to 2007 wage levels.
Sources: Bureau of Labor Statistics; California Employment Development Department
Prepared by: Keyser Marston Associates, Inc.
Filename: \\Sf-fsl\wp\12\12062\009\SCC-Hotel 6-5-08.xls; Compensation; 6/5/2008; dd
APPENDIX TABLE 9
2006 NATIONAL MEDICAL OFFICE WORKER DISTRIBUTION BY OCCUPATION
SUMC & SSC EXPANSION - HOUSING NEEDS ANALYSIS
CITY OF PALO ALTO, CA DRAFT FOR DISCUSSION WITH STAFF ONLY
Major Occupations (2% or more)
Management occupations
Healthcare practitioners and technical occupations
Healthcare support occupations
Office and administrative support occupations
All Other Medical Office Related Occupations
INDUSTRY TOTAL
2006 National
Medical Office Industry
Occupation Distribution
48,780 2.3%
875,880 41.2%
323,010 15.2%
793,070 37.3%
84 030 4.O%
2,124,770 100.0%
Source: Bureau of Labor Statistics
Prepared by: Keyser Marston Associates, Inc.
Filename: \\Sf-fs1\wp\12\12062\009\Non SUMC Providers 6-5-08.xls; Major Occupations Matrix; 6/5/2008; dd
APPENDIX TABLE 10
AVERAGE ANNUAL COMPENSATION, 2007
MEDICAL OFFICE WORKER OCCUPATIONS
SUMC & SSC EXPANSION - HOUSING NEEDS ANALYSIS
CITY OF PALO ALTO, CA
Occupation
DRAFT FOR DISCUSSION WITH STAFF ONLY
% of Total
2007 Avg.Occupation % of Total
Compensation ~Group ~Workers
Page 1 of 2
Management occupations
Chief executives
General and operations managers
Administrative services managers
Financial managers
Medical and health services managers
Managers, all other
All Other Management occupations (Avg. All Categories)
Weighted Mean Annual Wage
$145,600 4 5.0%0.1%
$134,400 28.5%0.7%
$100,400 9.4%0.2%
$132,900 5.0%0.1%
$104,400 44.7%1.0%
$134,300 2.0%0.0%
$130,400 5.2%0.1%
$118,100 100.0%2.3%
Healthcare practitioners and technical occupations
Anesthesiologists
Family and general practitioners
Internists, general
Obstetricians and gynecologists
Pediatricians, general
Surgeons
Physicians and surgeons, all other
Physician assistants
Registered nurses
Medical and clinical laboratory technicians ’
Radiologic technologists and technicians
Licensed practical and licensed vocational nurses
Medical records and health information technicians
All Other Healthcare practitioners and technical occupations (Avg. All Categories)
Weighted Mean Annual Wage
$145
$145
$142
$145
$145
$145
$145
$91 800
$95400
$6O 6OO
$76 100
$56 400
$44 300
$103,600
600 4
600 4
000
600 4
600 4
600 4
600 4
2.8%1.2%
8.2%3.4%
4.3%1.8%
2.2%0.9%
2.6%1.1%
4.9%2.0%
10.5%4.3%
4.1%1.7%
23.9%9.8%
2.7%1.1%
4.6%1.9%
10.4%4,3%
5.0%2.0%
13.9%5.7%
100.0%41.2%
Healthcare support occupations
Nursing aides, orderlies, and attendants
Medical assistants
Medical transcriptionists
Healthcare support workers, all other
All Other Healthcare support occupations (Avg. All Categories)
Weighted Mean Annual Wage
$35,400 4.4%0.7%
$35,500 78.7%12.0%
$43,500 8.8%1.3%
$41,500 3.3%0.5%
$35,800 4.8%0.7%
$36,400 100.0%15.2%
Source: Bureau of Labor Statistics; California Employment Development Department
Prepared by: Keyser Marston Associates, Inc.
Filename: \\Sf-fs1\wp\12\12062\009\Non SUMC Providers 6-5-08.xls; Compensation; 6/5/2008; dd
Occupation
Page 2 of 2
Office and administrative support occupations
First-line supervisors/managers of office and administrative support workers
Bill and account collectors
Billing and posting clerks and machine operators
Bookkeeping, accounting, and auditing clerks
File clerks
Receptionists and information clerks
Executive secretaries and administrative assistants
Medical secretaries
Secretaries, except legal, medical, and executive
Insurance claims and policy processing clerks
All Other Office and administrative support occupations (Avg. All Categories)
Weighted Mean Annual Wage
2007 Avg.
Compensation z
% of Total
Occupation % of Total
Group 3 Workers
$59,000 8.2%3.0%
$45,200 4.3%1.6%
$38,300 11.5%4.3%
$41,800 4.1%1.5%
$29,700 4.2%1.6%
$34,100 21.0%7.8%
$53,600 3.4%1.3%
$37,300 20.2%7.5%
$37,600 5.5%2.1%
$33,800 10.4%3.9%
$40,800 7.3%2.7%
$39,200 100.0%37.3%
96.0%
1 Including occupations representing 2% or more of the major occupation group
2 The methodology utilized by the California Employment Development Department (EDD) assumes tRat hourly paid employees are employed full-time.
Annual compensation is calculated by EDD by multiplying hourly wages by 40 hours per work week by 52 weeks.
3 Occupation percentages are based on the 2005 National Industry - Specific Occupational Employment survey compiled by the Bureau of Labor Statistics.
Wages are based on the 2006 Occupational Employment Survey data for San Jose-Sunnyvale-Santa Clara, CA MSA (Santa Clara and San Benito
Counties) updated by the California Employment Development Department to 2007 wage levels.
4 EDD data indicates average compensation above $145,600 per year for this occupation but does not provide estimates when average compensation levels
exceed this threshold.
Source: Bureau of Labor Statistics; California Employment Development Department
Prepared by: Keyser Marston Associates, Inc.
Filename: \\Sf-fsl\wp\12\12062\009\Non SUMC Providers 6-5-08.xls; Compensation; 6/5/2008; dd
APPENDIX 11
SHC AND LPHC EXISTING EMPLOYEE SALARY DISTRIBUTION DAT~
SUMC & SSC EXPANSION - HOUSING NEEDS ANALYSIS
PALO ALTO, CA WORKING DRAFT FOR REVIEW BY STAFF ONLY
Compensation Range
Annualized Full Time
Total for 2006 Equivalent 1
Employees working 20%
$10,000 $14,999
$15,000 $19,999
$20,000 $24,999
$25,000 $29,999
$30,000 $34,999
$35,000 $39,999
$40,000 or more
Employees working 30%
$10,000 $t4,999
$15,000 $19,999
$20,000 $24,999
$25,000 $29,999
$30,000 $34,999
$35,000 $39,999
$40,000 $44,999
$45,000 $49,999
$50,000 $54,999
$55,000 $59,999
$60,000 or more
time
$5O,OOO
$75,000
$100,000
$125,000
$150,000
$175,000
$2O0,OOO
time
$33,333
$50,000
$66,667
$83,333
$100,000
$116,667
$133,333
$150,000
$166,667
$183,333
$200,000
-$74,995
-$99,995
-$124,995
-$149,995
-$174,995,
-$199,995
or more
-$49,997
-$66,663
$83,330
$99,997
$116,663
$133,330
$149,997
$166,663
$183,330
$199,997
or more
SHC
Cumulative % of
No. Employees Employees
0
2
2
3
3
7
10
O%
7%
15%
26%
37%
63%
100%
5%
5%
11%
11%
11%
21%
37%
42%
58%
63%
100%
1
0
1
0
0
2
3
1
3
1
7
No. Employees
1
4
4
5
5
0
10
0
3
5
2
8
6
9
7
5
6
28
LPHC
Cumulative % of
Employees
3%
17%
31%
48%
66%
66%
I O0%
0%
4%
10%
13%
23%
30%
42-°/o
51%
57%
65%
100%
Employees working 50% time
$10,000 $14,999
$15,000 $19,999
$20,000 - $24,999
$25,000 $29,999
$30,000 $34,999
$35,000 $39,999
$40,000 $44,999
$45,000 $49,999
$50,000 $54,999
$55,000 $59,999
$60,000 $64,999
$65,000 $69,999
$70,000 $74,999
$75,000 $79,999
$80,000 $84,999
$85,000 $89,999
$90,000 $94,999
$95,000 $99,999
$100,000 - or more
$20,000 $29,998
$30,000 $39,998
$40,000 $49,998
$50,000 $59,998
$60,000 $69,998
$70,000 $79,998
$80,000 $89,998
$90,000 $99,998
$100,000 $109,998
$110,000 $119,998
$120,000 $129,998
$130,000 $139,998
$140,000 $149,998
$150,000 $159,998
$160,000 $169,998
$170,000 $179,998
$180,000 $189,998
$190,000 $199,998
$200,000 - or more
3
3
10
24
25
32
20
27
22
20
27
24
23
14
6
5
4
6
13
1%
2%
5%
13%
21%
31%
38%
47%
54%
6o%
69%
77%
84%
89%
91%
93%
94%
96%
100%
1
4
0
3
13
11
7
11
8
3
8
17
17
6
3
0
2
4
8
1%
4%
4%
6%
17%
25%
31%
40%
46%
48%
55%
68%
82%
87%
89%
89%
9O%
94%
10o%
Keyser Marston Associates, Inc.
File: \\Sf-fsl\wp\12\12062\009\SUMC data appendix 6-5-08,xls; APPDX 11 SHC&LPHC EXISTING PAY; 6/5/2008; dd
Compensation Range SHC LPHC
Annualized Full Time I Cumulative % of Cumulative % of
Total for 2006." Equivalent i ~ No. Employees Employees No. Employees Employees
Employees working 60% time
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
$50,000
$55,000
$60,000
$65,000
$70,000
$75,000
$80,000
$85,000
$90,000
$95,000
$100,000
$105,000
$110,000
$115,000
$120,000
Employees
$15,000
$35,000
$80,000
$105,000
$19,999
$24,999
$29,999
$34,999
$39,999
$44,999
$49,999
$54,999
$59,999
$64,999
$25,000 $33,332
$33,333 $41,665
$41,667 $49,998
$50,000 $58,332
$58,333 $66,665
$66,667 $74,998
$75,000 $83,332
$83,333 $91,665
$91,667 $99,998
$100,000 -$108,332
3
1
7
18
13
16
18
13
14
21
1%
1%
3%
9%i
13%
18%
23%
27%
31%
38%
1
2
6
t4
16
8
8
3
6
9
0°,4
1o,4
4°,4
11o,4
19o,4
22°,4
26oA
28%
30oA
35oA
42%
49%
56%
65%
75%
85%
89%
91%
93%
95%
97%
100%
$69,999
- $74,999
- $79,999
- $84,999
- $89,999
- $94,999
- $99,999
- $1o4,999
-, $109,999
$114,999
$119,999
or mo~
working 63% time
$19,999
$39,999
$84,999
$109,999
$108,333 -$116,665
$116,667 - $124,998
$t25,000 -$133,332
$133,333 -$141,665
$141,667 -$149,998
$150,000 -$158,332
$158,333 -$166,665
$166,667 - $174,998
$175,000 - $183,332
$183,333 $191,665
$191,667 $199,998
$200,000 or more
’$23,810 $31,744
$55,556 $63,490
$126,984 $134,919
$166,667 $174,602
12
19
3O
31
30
24
18
11
10
4
6
10
1
1
1
1
41%
47%
56%
66%
75%
82%
88%
91%
94%
95%
97%
100%
25%
5O%
75%
100%
15
14
15
20
2O
21
8
6
3
5
4
6
0
0
0
0
N/A
N/A
N/A
N/A
Keyser Marston Associates, Inc.
File: \\Sf-fs1\wp\12\12062\009\SUMC data appendix 6-5-08.xls;APPDX 11 SHC&LPHC EXISTING PAY; 6/5/2008; dd
Compensation Range
Annualized Full Time
Total for 2006 Equivalent 1
Employees
$17,700
$20,00O
$25,OOO
$30,000
$35,000
$40,000
$45,000
$50,000
$55,000
$60,000
$65,000
$70,000
$75,000
$80,000
$85,000
$90,000
$95,000
$100,000
$105,000
$110,000
$115,000
$120,000
$125,000
$130,000
$135,000
$140,000
$145,00Q
$150,000
$155,000
$160,000
$165,000
$170,000
$175,000
$180,000
$185,000
$190,000
$195,000
$200,000
working 70% time or more
$19,999
$24,999
$29,999
$34,999
$39,999
$44,999
$49,999
$54,999
$59,999
$64,999
$69,999
$74,999
$79,999
$84,999
$89,999
$94,999
$99,999
$104,999
$109,999
$114,999
$119,999
$124,999
$129,999
$134,999
$139,999
$144,999
$149,999
$154,999
$159,999
$164,999
$169,999
$174,999
$179,999
$184,999
$189,999
$194,999
$199,999
or more
$17,700 $19,999
$20,000 $24,999
$25,000 $29,999
$30,000 $34,999
$35,000 $39,999
$40,000 $44,999
$45,000 $49,999
$50,000 $54,999
$55,000 $59,999
$60,000 $64,999
$65,000 $69,999
$70,000 $74,999
$75,000 $79,999
$80,000 $84,999
$85,000 $89,999
$90,000 $94,999
$95,000 $99,999
$100,000 $104,999
$105,000 $109,999
$110,000 $114,999
$115,000 -$119,999
$120,000 $124,999
$125,000 $129,999
$130,000 $134,999
$135,000 $139,999
$140,000 $144,999
$145,000 $149,999
$150,000 $154,999
$155,000 $159,999
$160,000 - $164,999
$165,000 $169,999
$170,000 $174,999
$175,000 $179,999
$180,000 $184,999
$185,000 $189,999
$190,000 $194,999
$195,000 $199,999
$200,000 - ormo~
GRAND TOTAL
SHC
Cumulative % of
No. Employees Employees No. Employees
O%
1%
1%
3%
6%
14%
21%
32%
40%
49%
54%
59%
62%
66%
69%
72%
76%
79%
83%
86%
89%
91%
93%
94%
95%
96%
97%
97%
98%
98%
98%
98%
99%
99%
99%
99%
99%
100%
0
37
32
8O
158
423
417
551
449
469
248
275
153
216
153
177
195
196
189
162
155
128
94
61
53
62
35
22
21
17
14
12
2
7
13
5
4
50
6,022
12
11
9
27
69
110
136
107
91
79
7O
59
71
8O
66
104
108
110
84
75
78
67
43
33
30
21
12
17
10
6
4
4
4
10
0
5
3
2O
2,289
LPHC
Cumulative % of
Employees
1%
1%
2%
3%
7%
13%
20%
26%
31%
35%
39%
42%
46%
5O%
54%
6O%
66%
71%
76%
80%
84%
88%
90%
92%
94%
95%
96%
96%
97%
97%
98%
98%
98%
98%
98%
99%
99%
100%
Full Time Equivalent Employees
(70% time or more weighted as full time)
5,700 2,064
0.94653 0.90149
Source: Stanford University Medical Center 2007,
(1) Part time employee compensation ranges were adjusted to annualized full time equivalent pay ranges to approximate annual compensation if the employee
had worked full time.
Keyser Marston Associates, Inc.
¯ File: \\Sf-fs1\wp\12\12062\009\SUMC data appendix 6-5-08.xls; APPDX 11 SHC&LPHC EXISTING PAY; 6/5/2008; dd
ATTACHMENT B
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
Planning and Transportation Commission Meeting
Verbatim Minutes
October 1, 2008
EXCERPT
Study Session:
Stanford University Medical Center and Stanford Shopping Center Expansion Projects: Study
Session Regarding Housing Needs Analysis.
Mr. Steven Turner, Senior Planner: The consultant will be making a presentation regarding the
report after the Staff presentation.
Chair Garber: Very good. Please.
Mr. Turner: Good evening Chairman Garber and Commissioners. The purpose of tonight’s
meeting is to present the Commission the Housing Needs Analysis prepared by Keyser Marston
Associates. This is the third meeting with the Commission focusing on specific topics related to
the Stanford projects. In April Staff and the Commission heard from the City’s Peer Review
Consultant on Connectivity and Linkages issues between the project sites and Palo Alto and a
description of the proposed Village Concept alternative. In June the Commission held a
discussion on the fiscal issues accompanying the project. Tonight’s meeting is focusing on
issues related to employment and more specifically the anticipated housing needs that would be
generated by the projects.
Early on in the process prior to Keyser Marston’s work on the housing analysis the Commission,
City Council, and members 0fthe public expressed their conderns that the projects could
generate a significant demand for housing. In response to these comments Staff developed a key
planning objective for housing, which is to identify strategies for accomplishing housing with the
focus on below market rate residential units, which would be available to help accommodate
employment generated by the projects. The primary instruments that will describe the housing
requirements for the projects will be the Development Agreements. These Agreements will
describe whether housing needs are addressed through fees, dedication of sites for housing,
construction of actual housing units, or some combination of these approaches.
Since our last meeting with the Commission, Staff’s efforts have been focused on the
development of the Draft EIR, which is expected to be released early next year. In addition,
fiscal and hotel analysis are also being developed and those are expected to be released with or
near the release of the Draft EIR.
We have a couple of Staff members here with us tonight to answer any questions regarding Palo
Alto’s housing policies and programs. We have Cathy Siegel, the Advance Planning Manager
and we have Ron Barbiera our Senior Housing Planner. With that I would like to introduce Kate
Funk from Keyser Marston Associates who will give a summary of the report. Thank you.
Page 1
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
I’m sorry Kate, one other item. We have a couple of items at places this evening. One is a letter
from Tom Jordan who could not be here tonight so he has expressed his concerns through his
letter. Also, tonight you have received from Jean McCown a section of the San Carlos PAMF
EIR regarding population employment and housing and Jean will be speaking to that later on
tonight. Thank you.
Chair Garber: Thank you. As a reminder, the time that we have allotted for this item is an hour
and one-half. The next item will start at 7:30. We are giving you ten minutes to speak.
Mr. Turner: Actually, if we could have 15.
Chair Garber: Fifteen is fine.
Ms. Kate Funk, Keyser Marston Associates, San Francisco: Thank you. It is a pleasure to be
here this evening. First Keyser Marston Associates who I represent is very briefly a real estate
advisory firm that serves primarily a public sector clientele. In addition to doing transaction
sorts of analyses we have a large practice in economic impact, fiscal impact, affordable housing,
and other related areas. I, myself, have worked on this jobs/housing kind of linage question for
almost 20 years now under a whole range of different circumstances. Our charge of this analysis
and the purpose is to determine the housing needs generated by the proposed projects. With that
we have provided a report, which I believe you have, that is an analysis of the demand for
housing by affordability level generated by the Medical Center and Shopping Center expansions.
This report is expected to accompany the EIR for the project and has a number of interrelated
topics. To perform this analysis we used our own job/housing nexus model that we developed
over 15 years ago to analyze the linkages between land use and housing needs by affordability
level. It has been used extensively for generic type housing impact fees including that of this
city, and we have used it any number of times now customized it for analyzing specific projects
of which this is obviously one or two. ’
Our starting point of the analysis is the net additional space and jobs added by the projects. We
start with the Medical Center. This look innocuously simple, it took several iterations to get
here, to express in one simple number the net added building area for the major components of
the proj ect, the School of Medicine having no net area, a rebuilding of over 400,000 square feet.
What we have called Non-SMUC refers to space that will be occupied by people who are not
employees of Stanford per se such as medical office and other clinics where they may practice in
the hospital and but they are not on the Stanford payroll. The employment levels have been
provided by Stanford and were subject to a lot of discussion and cross-examination on our part.
We met a number of times and went back and forth on the subject of contract employees, how
the nursing staff relates to these figures since so many of them are temporary workers at this
time, and other kinds of possible outside contractors and so forth. Where nursing for example
are outside employees now the Medical Center would prefer that they be permanent employees,
hopes they will be in the future, and they are treated as if they are permanent employees. So
when we see net increase in employment that includes increases in things such as the nursing
staff that will come with the expansions. One more note on the column on the right is Employee
Households, a smaller number than employment, reflecting the fact that most households today
have more than one worker. In fact, in Santa Clara County you have 1.72 workers for worker
Page 2
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
household. In the 2000 Census, and obviously the worker household is the unit that needs
housing, whereas if you measured just from employees you would be over-counting because
there are a multiple number of workers within the household. For the Shopping Center we have
a like set of figures with the planned expansion area, the hotel 120 rooms. Again, Stanford
provided estimates of employment but having done a lot of work in shopping centers we were
able to confirm the level of employment and density related to building area. If anything we are
looking at very dense emp!oyment here, which is appropriate given the high sales volumes of the
Shopping Center which higher sales activity takes more employment. Again, we have Employee
Households at 1.72 workers per worker household, less than the number of employees.
As for the income, the sources of information on income very briefly and I will talk more later,
the Medical Center information was provided by the Applicant and for the non-Stanford
employees, which would be the medical office portion of the Medical Center and the Shopping
Center we were able to use published gov4rnmental sources such as Employment Development
Department and the Bureau of Labor Statistics, and certainly we used local information wherever
possible for Santa Clara County. Thatwas able to give us compensation levels for all the various
types of jobs.
Next. Very briefly the way the analysis works or proceeds is we start with employment growth,
we go to households, which we have already seen. When we don’t have information on jobs as
we did for the Medical Center from Stanford we are able to determine the occupational
distribution of employees such as in a shopping center what share of management, middle
management, sales clerks, and so forth. From the occupation we can get compensation levels
again from state agencies. Then what our model does is put these households into different
household sizes per the US Census for Santa Clara County and distribute them according to the
categories of income that meet your affordable income criteria. The model allocates the
households into the various strata depending upon what the income is in combination with the
household size. ’
There are several underlying concepts and assumptions that I think are fair to put out there. The
job growth is tied to population growth. New workspace buildings are a precondition to job
growth, which is to say if you weren’t building this project you would not have these net new
jobs. You might have a period some greater intensity of employment but at some point you have
to have new space. The jobs are net new to the region, which is also to say that there is a
substitution concept, if somebody come and works here having moved from another job across
town somewhere there is a new job in the chain of events. We have only counted jobs in the
building here. We don’t have indirect jobs, multiplier effects, and other ways that we might
count that would make these figures even larger. Finally, we agreed with Stanford that the only ’
way we could address the future was to assume that it would be similar to today in terms of the
employment composition. They had no projection as to how the composition would be different.
We couldn’t identify any other source and it was the safest way to proceed.
So the next slide is just the income definitions for your area. Something, those of you who have
worked with housing have seen many times over. Median income, household of four, and the
$105,500 right in the middle there.
Page 3
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
3O
31
32
33
34
35
36
37
38
39
4O
41
42
43
44
45
46
1 Going on to the results of the analysis first for the Shopping Center. This is the output of the
2 model showing by the various levels of area median income; which is what the AMI refers to
3 how many worker households fall into the various tiers of affordability. The finding which was
4 no surprise to us who have worked many times on retail and hotel projects the vast majority in
5 this kind of a project are very low paying jobs even when two household incomes are put
together given the income levels of this county we still see 70 percent coming out in the under 50
percent or very low income category. Going to the other end of the spectrum only a very few
jobs in management levels that put them up over 150 percent of area median income.
Moving onto the Medical Center we have a very different pattern. We have as much as 38
percent of these households over 150 percent and only seven percent at the very low tier, and a
fairly even distribution on the 50 to 80 percent and 100 percent and so forth. So that is very
briefly the output of the analysis on the income stratification of the net new jobs associated with
Medical Center.
This last slide is what happens when you put the two projects together. The heavy incidents in
the very low end comes up again with the Shopping Center in there.
I am not going to try to talk any more about the figures per se but I mentioned previously that we
spent quite a bit of time trying to confirm the level of employment. We also spent a lot of time
trying to confirm and make sure that we were confident in our results on the income stratification
particularly of the Medical Center. Part of this confirmation was something of an education on
our part on how teaching hospitals are different from community hospitals. We talked with
Arlene Berkoff and other people did some of our own homework and basically identified at least
four factors that really make this look different in income stratification than what you would find
with a community hospital. Higher level of care, treatment of patients with a higher acuity level,
which apparently affects the jobs from the kitchen to the cleanup to routine procedures all the
way up to surgery. You have a lot of state-of-the-art technology in a teaching facility of this sort
and a lot of highly trained technicians. Then there is the research and education mission, which
results in teams, and higher staffing, and higher skill levels than you would find in a community
hospital. Another area of our due diligence to confirm our findings was we actually were able to
obtain the payroll information from UCSF. UCSF because it is also a teaching hospital, a very
large one in the same metropolitan area with the same compensation levels. It being a public
institution we were able to get through their libraries their payroll information and quite honestly
work it, sort it, and aggregate it in a manner to match approximately what we had from Stanford
and see if we found similar results and we did. We also managed to get online, I believe, the
union contracts to see if those agreements were consistent with what we were seeing on the
compensation levels and again these were even older contracts than may be in effect now and
yes. .
Finally, the issue of part-time workers created quite a challenge because something like 40
percent of all the Stanford Medical Center employees are part-time and how do we treat them?
We did a number of tests to treat them several different ways. We said what if we assume all of
them hold other jobs, which is to say their incomes are bigger but the portion of the job that is
attributable to Stanford is only a small part and what would the results be if we did that? Then
we said let’s assume none of the part-time workers hold other jobs and how does the results
Page 4
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
4O
41
42
43
44
45
46
come out differently with that assumption? Then we came back to our midway assumption
which is to say those that work 70 percent time or more we assumed did not hold other jobs,
those who worked less than that we prorated their contribution to the pool. All parties saw these
different results and agreed that we could work with the midway presentation.
So essentially that concludes our commentary on our findings that we did what we could with
readily available information and then some to not only work with what the Applicant provided
us but tried to crosscheck it with other sources as best we could. I believe we are confident that
we really do have a good solid representation of the payroll and household income strata.
Finally, one last comment is what we have presented here is all jobs and all households. There is
always the question of what share should we be talking about within Palo Alto? There is no
simple answer to that question. It is a policy matter. It is quite honestly what you might
negotiate. We have shown in the analysis results thus far 100 percent of the need, which means
that new worker households will live somewhere within commuting distance. It could be across
the bridge and several counties away. You could look at the existing percent of the workforce
that lives locally and if you go to the 2000 Census that is 14.2 percent having dropped from
about 20 percent in 1980. Usually it is a downward trajectory. You might have some other
policy-based target. We did prepare a report for this city on your housing fee in 1993 whereupon
we, working with Staff, came up with 33 percent which was blessed on some level as part of the
adoption of that program but quite honestly it didn’t have a major role. In any case, 33 percent
does exist in your policy background. You could have no specific target and let it be market
driven. Where you would probably get something well under ten percent living locally the
current commute shed of Stanford Medical Center employees has 8.2 percent living locally. Of
course the more you have long-term employees the more likely you are to have people who have
been living here for awhile and the more you have to hire new people the less likely they are
going to live here. Obviously the cost of gasoline and all those things can change some of these
past patterns but that is up until now what we have seen.
So I will leave it there on this presentation of alternatives. Certainly we have no conclusion or
recommendation in that area it is really a policy matter for the City. With that I am happy to
answer questions.
Chair Garber: Before we go to questions, which we will do and then we will wrap up with
comments later, let us invite the other speaker Jean McCown. I have no other cards from anyone
in the public. If anyone else would like to speak on this topic please fill out a card. Jean, five
minutes.
Ms. Jean McCown, Stanford University: I am from the Office of Government and Community
Relations at Stanford University. As I know you are all aware that we have a team of people
from Stanford Hospital and Clinics, Lucile Packard Children’s Hospital, and the University
working together on this project on this particular subject area because of my knowledge and
history with housing issues and City of Palo Alto policy in this arena I have been the one to sort
of provide some of that expertise in the way that we are thinking about this issue on behalf of the
hospitals.
Page 5
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16-
17
18
19
20
21
22
23
24
25
26
27
28
29
3O
31
32
33
34
35
36
37
38
39
4O
41
42
43
44
45
46
I am going to focus on three areas. The first is really some follow up to what Kate Funk just
presented to you on what the Keyser Marston analysis informs you of. Secondly what is not in "
that analysis but will come and needs to be done in the Environmental Impact Report. Then
finally what are some principles that we think are important to consider in the housing discussion
as we go forward.
The KMA study as was just explained to you covers several important first analytical steps to
determine what the housing impacts may be as a result of the hospitals and Medical Center
projects. By the way, I am speaking just to those projects. I am not speaking about the Shopping
Center. The important further analysis that has to be done in the EIR is illustrated by the chapter
from the San Carlos EIR for PAMF that I provided to you. That is the same baseline information
from a KMA study was used in that San Carlos study in 2006 and the same EIR consultant that
did that work is the consultant that is doing the work for the City of Palo Alto. So that presents
you with kind of what the steps are in the process. I know you have not read it, but you will have
chance to in the future. So as you heard, KMA first determines the number of employees. As
you saw for the two hospitals and some other non-hospital employment that is 2,243 and then it
applies this adjustment factor that was references, which results in the total household figure of
1,301 for the hospitals. Then as you heard they do the distribution of those new households in
the affordability levels. As was pointed out in the Staff Report only seven percent are in the very
low-income category of those future households and over 50 percent are in households that
would be earning over 120 percent of median income. Now the City of Palo Alto in its
Comprehensive Plan and the Housing Element and the BMR program has defined affordable
housing as serving those who earn up to 120 percent of median income. So for the hospitals if
you look at the total of 1,301 households and you focus on that affordable piece of up to 120
percent of median income that is 617 households. You do that math by backing out the numbers
for the people that earn the higher income levels.
Now the next critical step is what will be addressed in the E!R. What is not done in this study, it
is again what Kate just alluded to, and that is the step that determines the percentage of these
future households who are likely given all the factors that go into how people decide where they
want to live that will likely live in Palo Alto. As the San Carlos study states the choice of where
one lives depends on many factors such as schools, style of housing, types of amenities, location
of the work of the other wage earner in the family, local service, etc. So in the San Carlos
analysis they looked similarly to what Kate just mentioned that what is the citywide figure for
what percentage of people who work in our city live here and interestingly it is quite close to
Palo Alto’s, it is 14.3 percent. So they then, in the pages you have in front of you, applied that
percentage to the total household projection to come up with what the housing demand will be
for people likely to live in that city.
One other data point for you in addition to the 2000 Census figure that Kate mentioned of 14.2
percent of Palo Alto, presently if you look at our hospital employees nine percent of our current
employee base live in either Palo Alto or Stanford. So if you did apply that as your logic the
way the San Carlos PAMF study does then obviously you are going to drop down the household
numbers that would be looking for housing in Palo Alto by a considerable amount over what the
gross total number is that is in the KMA study.
Page 6
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
4O
41
42
43
44
45
46
Then the final step, which again will be done in the EIR and has not been done yet, is to
determine the availability of regional housing supply to meet that estimated demand. You will
see again in the analysis it is not ever limited jus to the city where the project might be it is
looking at a mdre regional approach to that. So when all of those steps are complete, when the
Draft EIR is out early next year then we wi!l have a picture of what the actual real housing
impacts may be with these projects.
That leads to my final comments, which are about how we might think about addressing housing
needs that may come about because of these projects. At this point, while we think it is
premature to suggest anything specifically there are some important principles. One is as the
Staff Report mentions we think the place for consideration of this issue is through the discussion
of the Development Agreement. Secondly, those discussions do need to be fully informed by the
EIR analysis of this issue and other issues so that that housing issue can be considered in context.
Three, as a policy matter the hospitals have been exempted from making contributions to the
City’s affordable housing programs. The public policy reasoning for that is similar to the reason
why new City facilities are not required to pay such fees. Both types of institutions contribute to
important community needs in significant ways and historically have not been asked to also
shoulder responsibility for providing affordable housing. Finally, it has been stated before and
we are reaffirming it now that the hospitals are willing to work with the City through the
Development Agreement process to arrive at a reasonable and appropriate solution addressing
project related housing needs particularly emphasizing affordable housing and that will come
later in the process. I am happy to answer questions later. We have other people here that can
field questions that I may not be able to address. Thank you.
Chair Garber: Thank you. We have one other card, Arma Shimko.
Ms. Anna Shimko, Counset for Simon Property: I am here on behalf of Simon Property. I am
the outside legal counsel for Simon. I just wanted on behalf of Simon to echo what Jean has said
with respect to the meaning of the numbers before you. They are an important but first step in a
process of determining what type of housing is going to be needed and where those needs are
going to be met. The EIR will have, as the PAMF EIR did, a much fuller exploration than you
currently have available of what that means and whether there will actually be any housing
impacts stemming from these projects. So that work is just beginning and you will see the
fruition of it at some later point.
I also just wanted to point out that unlike the hospitals, which as Jean mentioned are exempt
from the housing fees, the Shopping Center development is not exempt from the City’s housing
fees so we will be paying housing fees at the then current rates when the buildings are
constructed. Therefore, our impression is that we will be meeting any burden posed by the
housing needs by paying the fee that the City has imposed for that very purpose. Thank you.
Chair Garber: Thank you. Commissioners we have some questions here. Commissioner Keller
followed by Commissioner Lippert.
Commissioner Keller: So my first question is for the consultant. So I understood the
methodology for basically correcting from part-time to full-time. I think I understand your
Page 7
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
3O
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
methodology for figuring out what percentage of people are in dual income households.
Although I am surprised that there are so many dual income households in Santa Clara County
considering the rate of single p.eople and divorces. I don’t quite understand what your
methodology isfor figuring out what the income is of the second earner.
Ms. Funk: First of all, the rate of number of workers per worker household is from the Census
and it is all workers households in Santa Clara County since using a small area like the city
might not be representative. Your workers here come from all over the county and multiple
counties. The 1.72 has factored out non-worker households like retired people, students, and
people on public assistance. So then when we get to working with dual income households how
do we figure out second income? The answer is lacking any information otherwise we assume
that the second income is similar to the other earner in the family. Most of the research in recent
years supports that actually this is what is happening and happening far more now than did say
25 or particularly 50 years ago, where people tend to pair up with people in like kinds of
occupations and compensation levels. So that is the underlying assumption there. So if it is a
sales clerk it is likelyto be another sales clerk type compensation level or doctors and doctors.
Commissioner Keller: So you won’t have many nurses married to janitors or nurses married to
college professors?
Ms. Funk: Nurses and doctors are not marrying the way they used to.
Commissioner Keller: The second question is I understood the methodology being proposed by
the applicant is how many people would be expected to live within the City of Palo Alto. I
actually would like to think of it in terms of another way, which is if employment is increased
because of this by 1,000 households if you will, what would ABAG require us to have in terms
of the number of housing units that we should build? That seems to be a direct number in terms
of the impact on the City is how many households that ABAG requires us to build and the
various proportions. So I am wondering I am not sure if you would have that data or if Staff has
that data on what the yield rate is that they expect us to have.
Ms. Funk: I will give only a very partial answer because we have not looked into this question
on your behalf. We have done it elsewhere and it is not close to me. Part of the ABAG formula
does now include job growth. Of course it includes the number of jobs in the community not so
much the projected job growth. So if you have grown by a lot of jobs then your next cycle with
ABAG is probably going to have an increased number of housing kind of looking backwards as
to what your proportionate share might be. Exactly how that works, even if I had all the
information in front of me, I don’t think anyone knows exactly but I can’t do that this evening.
Mr. Curtis Williams, Interim Planning Director: I would just add and I don’t know if Cathy
wants to chime in on this as well, but ABAG doesn’t project based on individual projects. So
there is not just an immediate correlation that you can make between the job growth and that.
ABAG has essentially told us that this project is within the overall Context of job growth that is
anticipated and projected in the ABAG projections so from that perspectiTe it is sort of Within
the range of what we would be looking at in any event. It is not something that is above and
Page 8
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
3o
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
beyond and that we have to say 20 percent of any additional jobs need to be accounted for with
housing. There is not an easy formula to make that kind of equation.
Commissioner Keller: Thank ?)ou. One last question is Lucile Packed Children’s Hospital used
to have 216 rooms and there is an expansion going on, I am not sure of the status of completion
of this, to 257 rooms. I am wondering when the additional 41 rooms will be occupied and
whether your employment data reflects 216 rooms or 257 rooms and the sensitivity analysis of
that potential discrepancy.
Ms. Funk: Okay. I am going to have to do a little bit of homework to tell you exactly what the
assumption is with respect to beds. Maybe somebody from the Medical Center can answer that
better in terms of whether the net increase in square footage and jobs and how that relates to
those 40 or 60 beds that you are talking about.
Commissioner Keller: It is 41 beds not rooms.
Ms. Funk: Beds, yes.
Mr. Williams: I think we should ask the applicants that unless Steven or Cara knows the answer
to that. I think that is a good question and see sort of what that baseline was.
Chair Garber: Are there any volunteers from our applicant pool over there? As you approach
please identify yourself.
Mr. Mark Tortorich, Vice President of Design and Construction, Lucile Packard Children’s
Hospital and Stanford Hospital: The expansion that is going on at the Children’s Hospital now is
beds not rooms to make that clear. I believe it is a 28 bed net expansion. The employment data
that the consultant used is factual employment data that we Mve now. Then the projections are
based upon the projection at build out.
Commissioner Keller: So I am seeing 216 beds so I am a little confused. The interesting thing is
how many beds were there actually in the Census in 2007 corresponding to your employment
data?
Mr. Tortorich: I can’t answer that question specifically. The employment data was factual data
at the time that we took it. We may have at that point, because I know we have been staffing for
the future expansion that is under construction, we may have already had new employees already
on board. But it is a factual count of people on board and then there is a projection to the future.
Commissioner Keller: Okay, correct me ifI am wrong, so what you are saying is it is not clear
whether the employment data reflected 257 beds, whether it reflected 216 beds, or some number
in between.
Mr. Tortorich: It reflected the number of employees that we had on board at the time the data
was submitted.
Page 9
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
Commissioner Keller: Thank you.
Chair Garber: Thank you.
Ms. Funk: One other addition, which I hope will help. The information that we were provided
that went with all these figures is that Lucile Packard has 257 beds and would expand by 104 for
a total of 361 beds. Does that help?
Commissioner Keller: Yes, so is the new employment figure based on some projection? In
other words, do you say based on 300-plus beds you are going to figure out what the
employment should be for that or do you proportionately increase it from whatever the baseline
is?
Ms. Funk: First of all, the projection is more keyed to square feet than beds and 460,000 square
feet is the net increment of space of which 104 new beds is a part of it. The new employment is
as I say Stanford’s estimate of the new employment confirmed as best we could by our own
research on the expected number of employees that would go with this amount of space in a
modem hospital setting, which has major differences from the old space.
Commissioner Keller: Thank you.
Chair Garber: Commissioner Lippert followed by Commissioner Fineberg.
Commissioner Lippert: I just wanted to follow up on Commissioner Ke!ler’s question regarding
the ABAG numbers a little bit more to get some better clarification here. We are about to go
through a housing update in the Comprehensive Plan. The 1,800 number of units that are cited
in the report here would that number go against our housing allocation that ABAG is requesting
us to comply with if they were built in Palo Alto?
Mr. Williams: That is a key question, if they all were built, if we required all of them to be built.
I will let Julie answer.
Ms. Julie Caporgno, Chief Planning and Transportation Official: I guess if we put the 1,800 on
our inventory, if we had sites for them and the locations were on our inventory then we would
get credit for them. So we would need to have them. Or if they were built and they were of the
right income levels we have a need for then we would get credit for them. So if sites were
identified to accommodate them and they were placed on the inventory but we didn’t build them
we would still get credit when we finish this Housing Element or if they were developed during ’
this timeframe to accommodate this housing then we would get credit for them.
Commissioner Lippert: I think Jean McCown has something to say about that.
Ms. McCown: If I could add something that might help. If you look at the San Carlos material
on page 3.12-9 this shows you how they figure out where the projected housing demand gets
allocated. So if you look at that table the third column over is their analysis, ignore the numbers
because it is not what our numbers are, but they projected that there would be 600 housing units
Page 10
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
3O
31
32
33
34
35
36
37
38
39
4O
41
42
43
44
45
46
needed for that hospital project in San Carlos. They then look at what are the percentages that
would likely locate in different communities. Then they look at what ABAG says for each of
those communities about the number of housing units in those communities and determine on a
regional basis not just what Palo Alto’s ABAG allocation might be but what these other
communities are also being asked to provide by way of future housing. They go through that
analysis to determine whether there is a supply in the appropriate region to accommodate the
housing units. So it isn’t just 1,800 units which is the total demand here would not be attributed
to Palo Alto by the EIR. It is going to be attributed to finding those housing units in a wide
variety of communities.’ The list will probably look quite similar to this because we are very
close in the region.
Mr. Williams: I was going to add our EIR is looking at that and developing a similar type of list
but with a couple of scenarios as to how much is required in Palo Alto and then how much would
be left outside and comparing it, I don’t know if we are landing on the side of comparing it to
ABAG housing needs numbers or to the ABAG projections for housing units and how that
compares in not only Palo Alto but also surrounding communities.
Commissioner Lippert: If the Chair would allow me I have a follow up on that. If that is the
case, and the EIR says in fact we have to build so many housing units and agrees with the
numbers here and says you should build so many housing units, and they are going to be
displaced and it is a condition of the draft of the Development Agreement that says so many
housing units have to be built to accommodate the delta or difference in number of people
working there do we in fact get that credit even if it might be built in another community? .What
I am thinking is if Stanford University were to say we will take some of our land and develop
that for more housing to meet the housing needs does it go to the county, does it go to us?
Mr. Williams: We don’t get credit for anything except what is built in our community with one
little exception that Julie could probably talk about that is po~ential!y out there, and potentially
with the county there is something that might be. a possibility with those other communities. I
don’t think at all if anything is built in those communities. Again, we can only get credit for
what is on our Housing Sites Inventory and/or what is constructed not what is projected in an
EIR or in some other form.
The EIR I want to point out I don’t think will require a number of housing units to be built. It
will show the impact depending on where those housing units might go.
Ms. Caporgno: Curtis is right. The only other way of doing that is if we got some special
legislation passed that enabled us for instance if it was on Stanford lands in the county and the
state legislature, which does this sometimes for jurisdictions if all three parties the county,
Stanford, and the City were amenable, we may be able to get credit for some development that
was developed in or listed on the county’s inventory in Stanford. It would actually be listed on
our inventory but be in Stanford and we could get credit for it under that scenario but we would
have to get special legislation for that.
Commissioner Lippert: If the Ch, air might indulge me just one more? Just following up with
that there is state law that does allow for below market rate units to be built in other
Page 11
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
4O
41
42
43
44
45
46
communities. So what could in fact happen is that the below market rate housing through fee
could be transferred to another community and we would get credit for meeting a portion of the
below market rate units. Woul.d that count towards our housing allocation?
Ms. Caporgno: I think that for it to be counted we would either have to have an agreement and
we would have had to have that agreement in place_by the end of this year for it to be counted
otherwise we would have to go through the special legislation. I don’t think given where we are
with the Development Agreement that that will occur. So it would probably have to go through
this process that identified special legislation or it would have to be something that was
identified within the City, a site within the City.
Commissioner Lippert: Thank you very much.
Chair Garber: Commissioner Fineberg.
Commissioner Fineber~: Question for the consultant please. My questions will focus on the
paragraph at the top of page two. I would like you to walk me through exactly how you arrive at
the 1,856 number and also I have some questions about using county averages rather than Palo
Alto actuals. I see in that paragraph that you have three steps. The first step is you calculate the
new jobs. I see the chart down below that it is 3,200 jobs. Then the second step, I know I am
going fast shall I wait for you to find the page?
Ms. Funk: Page two of the Staff Report?
Commissioner Fineberg: I am sorry, our Staff Report from City Staff.
Ms. Funk: Okay, now I am with you.
Commissioner Fineberg: The first full paragraph up at the top. It says that first it calculates the
3,200 new jobs. I see where that comes from.
Ms. Funk: Right.
Commissioner Fineberg: Then second it says KMA calculated the total number of new
households to be generated as a result of the increase in employment by dividing the number of
new jobs to be created, which is 3,200, by the average household size in Santa Clara County. So
what is the factor for the average household size in Santa Clara County?
Ms. Funk: Well, the 3,200 new jobs get translated to 1,856 new households by this 1.72 workers
per worker household. There may be other household members but it is the number of workers
in the household that is the adjustment factor we use.
Commissioner Fineberg: Okay, so 3,200 divided by 1.72 is 1,860. I understand that what you
are saying is the third step, which is KMA determines the number of new housing units needed
based on the number of new households. So what is the second step then? What is dividing the
3,200 by the average household size?
Page 12
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
Ms. Funk: Essentially the number of households is the same as the same as the number of
housing units. One could have a little vacancy factor in there but we equate these are the number
of households that need housir~g so it is that many units.
Commissioner Fineberg: So why the third step then? The second one is the average household
size. The third one is the units needed based on the number of new households. So I am just not
following the calculations.
Ms. Funk: Right. I think one of the missing steps that may not have made it into the Staff
Report that is in our report is again there is an adjustment factor on this part-time question that is
part of the calculation that goes from 3,200 jobs to 1,856 new households needing housing.
Commissioner Fineberg: So the part-time factor explains the difference between 1,860 and
1,856? It is four.
Ms. Funk: The 3,200 is actually after the part-time adjustment. So I believe if you divide 3,200
by 1.72 you should come up with 1,856.
Commissioner Fineberg: I got 1,860. So I still don’t understand what that has to do with
average household size. If it is being calculated on workers per household then it doesn’t matter
if a family has ten children.
Ms. Funk: When we have these 1,860 new households they are everything from one person to
six person households. We allocate them into household sizes per the existing Santa Clara
distribution of household sizes for worker households.
Commissioner Fineberg: Okay, so two then, the second step; really becomes irrelevant in this
calculation? It has nothing to do with the average household size of Santa Clara households?
Ms. Funk: The average household size is not part of this equation right here, no.
Commissioner Fineberg: Okay.
Ms. Funk: When you get to put a household of a certain income into which income level it does
depend on whether the household has two people or six people.
Commissioner Fineberg: Okay, I correct what I just said. So number two then, the second step,
is relevant later after we have calculated the number of new households. Then for the third step
where you are determining the number of new houses based on the number of new households so
you are dividing the 3,200 by the 1.72 that is yielding the 1,856 and is it philosophically correct
to use a Santa Clara average or a Palo Alto actual and would it change it and in what direction?
Ms. Funk: The reason we use the Santa Clara is because when you have only eight to nine
percent of the workers at the Medical Center living in Palo Alto the other 92percent - well, Palo
Alto isn’t a very good representation of what the workforce at the Medical Center is like. It is
Page 13
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
3O
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
more like the whole county or arguably we might have merged Santa Clara and San Mateo
Counties since you are on the border but quite honestly it is very similar in terms of the
household size structure. So it.wouldn’t have made much difference.
Commissioner Fineberg: Okay.
Ms. Funk: The City of Palo Alto has such a small share of the workers in the Medical Center
living here using Palo Alto average is not appropriate in our judgment.
Commissioner Fineber~: Okay, thank you.
Chair Garber: Thank you. Commissioner Holman..
Commissioner Holman: I think my questions are for Staff but stand by. There were comments
made by the applicants that the EIR would refine the true housing needs. That is simplified from
their statements but could Staff comment on that and what your perspective of that is?
Ms. Cara Silver, Senior Assistant City Attorney: What the EIR will do is look at two things. It
will look at the projected population growth of the project in terms of the population and housiaag
section. Then it will also, under the City’s thresholds of significance, look at a jobs/housing
balance in the city and see if this project will impact the existing jobs/housing ratio. So that is
the task of the EIR.
Commissioner Holman: I want to make sure I am clear on this, from what you are saying I don’t
interpret that that is going to change the 1,856 housing units that the projects will generate
demand for, correct?
Ms. Silver: That is correct.
Commissioner Holman: Okay, I just wanted to get that refinement down. Could Staff comment
on the City’s previous comments having to do with hospitals being exempt from housing fees?
Mr. Williams: Hospitals have been exempt from the housing impact fees. We believe it is
correct what Jean McCown said as far as that the original intent of that likely was that there were
other community benefits that were contributed by hospitals that were felt perhaps to counter the
housing additional costs. However, we as you may recall went forward to the Council more than
a year ago now with an amendment. KMA looked at the nexus study for that and we went to the
Council and asked the Council to impose a housing fee on hospitals. The Council did not do so
based on - I won’t get into the voting situation. The Council did not do so but at that time did
discuss and it is my recollection that Stanford indicated that it was more appropriate for this to be
addressed through a Development Agreement than through a housing fee process. So that is
where we have come from on this issue is that the Development Agreement is the appropriate
place to establish this rather than trying to figure out an impact fee. And, that because of the
magnitude of this project that it is appropriate for some component of housing to be apart and
parcel of that Development Agreement. What the extent is of that certainly as she mentioned is
yet to be determined, focusing on affordable versus market rate, the potential locations of those,
Page 14
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
3O
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
how much any contribution is, all those questions are policy questions up in the air, but the
Development Agreement we believe is the appropriate place to have that discussion.
1
2
3
4 Commissioner Holman: Becat{se I do note that there has been a fair amount of discussion about,
5 and this is in current dollars not when build out would be complete, that 617 for just the Medical
6 Center affordable units at $500,000 a piece which isthe current dollar valuation of those would
7 cost the City of Pa!o Alto $309 million to provide those or otherwise we have a degradation of
8 the quality of life here. If we didn’t provide them ourselves the reverse math I do then is if they
9 were created, and Staff will comment if my numbers are wrong, that we would have to provide
10 3,000 housing units to get the proportionate number of BMR units. So that is a difficult row to
hoe too to get there.
The locale of the housing units is going to be critical so the trips analysis will be a key factor in
commenting and playing into how we address the housing locations. One of the things that I find
frustrating I guess a little bit at this point in time is that understanding the wage levels and
income levels of some of the different sectors of employment both for the Medical Center and
Shopping Center that we are looking at the providing the housing units in a regional fashion. I
was going to ask the question that Commissioner Lippert did earlier so I appreciate yours about
ABAG credits.
Back to the part that I find a bit frustrating is that this is looked at as a regional solution. So my
question is has any consideration been given to mixed use, I know there are some horizonta!
aspects to mixed use that have been looked at to some extent in the project as it is stated now, but
what about vertical mixed use such that we are reducing trips, we are providing housing in a
more local fashion? Has any of that been apart of the review that is at the ARB?
Mr. Williams: Not at the ARB level, no. We have had internal discussions about some of those
options. At this point we tend to look more at what is sort immediately adjacent to the site in
terms of the General Use Permit sites and those that might be available that are well not right
there in terms of vertical mixed use, they are very proximate to the project and would reduce
trips significantly to be able to have workers living that close to particularly the hospital project.
Commissioner Holman: So is there any thought to considering vertical mixed use in addition?
Mr. Williams: We have had discussions and we have been considering that. At this point I can’t
say. That is not part of the applicant’s proposal it is more part of the Village Concept analysis.
So I think when you see that you will see some potential components of that that might address
that particular concern.
Commissioner Holman: Then my last question for this round if that is agreeable has to do with
ARB again. I dug out one of my old timelines and am still looking for an updated timeline. I
know it is a fluid situation but it really would be helpful to have an updated timeline. I
remember this being commented on and actually changed that there really are two or maybe
three reviews at the ARB, I think it is two reviews at the ARB, prior to the DEIR release on the
previous timetables. I know just from what I notice in the newspaper notifications that both
projects have been to the ARB numerous times. The reason I bring that up as a concern because
Page 15
1 it is the reason it came up during this timetable discussion was because I am presuming what is
2 being reviewed is full build out and that process having to do with Planned Community Zones
3 for instance in the past has not been effective or productive. So is that what is being reviewed at
4 the ARB and if you have any notion of how many times it has been there because it is a concern.
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
2O
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
4O
41
42
43
44
45
46
Mr. Turner: The ARB has conducted study sessions and preliminary reviews on both the
Stanford Shopping Center and Stanford Medical Center projects. They tend to focus on a
specific component of the projects. So one meeting might be on the Hoover Pavilion site, and
another study session might be on the School of Medicine buildings, but they have not looked at
the entire proj ect together as a whole. They are trying to understand the components of the
projects in easy digestible chunks before Staff brings to them a recommendation for a decision
on the whole project that would be a build out. So they are looking at little chunks as we go
along. We anticipate that we would have a number of formal meetings with the ARB whereby
Staff would request that the ARB make a recommendation.
Commissioner Holman: Just throwing it out there because housing is what we are talking about
tonight. If there is any discussion about including housing in any of those different components
that you are looking at at the ARB.
Mr. Turner: There has been no discussion of housing in any of those discussions with the ARB.
Chair Oarber: Thank you. For the benefit of those who have been coming in and joining us
recently we are in the midst of working through the first item. The second item will start at
approximately 7:30. We will take a small break between the two.
I have a couple of questions. The first one is for the consultant. Your study uses the word
’region’ in terms of where potential employees may locate. How do you define region? Is that
the Bay Area, the Peninsula, or wherever someone ends up living and also working at Stanford?
Ms. Funk: Essentially it is the latter. It is where the commuters are going to. So if they are
going as far as San Joaquin County that is part of the region or Santa Cruz for that matter. So the
region is within commuting distance.
Chair Garber: Have you done work in other communities that have projects of similar impact to
have an idea of how far and/or how dense that region might be that we should be thinking of?. Is
there anything comparable?
Ms. Funk: Not immediately off the top of my head. I think our understandings of commute and
all its ramifications is an evolving topic these days. So what may have - I will just leave it there.
We worked on other very large projects but again we get the commute shed from, which is a way
of saying the dispersion of workers within a jurisdiction from the Census and from the
transportation package that is done from the Census but that just tells you what is.
Chair Garber: So there are models of evaluating that if we want to get into that?
Ms. Funk: Yes.
Page 16
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
Chair Garber: Thank you. A question to Staff, just to confirm what I think is the understanding
from some of the Commissioners’ questions. The total number of housing units that is on page
three is a subset of what our current ABAG requirement is, is that correct as opposed to an
addition? Right, the ABAG number is on page four.
Mr. Williams: When you say it is subset you mean that if this number were - ABAG’s
projections for us are our housing need numbers. They do not say 1,856 units from the Stanford
project are part of all of that. They recognize first of all that we are not going to likely
accommodate 100 percent of them and again it is done at a much broader scale than project
specific. But whatever component of these sort of might be here is part of that analysis.
Chair Garber: Part of the ABAG number.
Mr. Williams: Well, part of what we anticipate is part of it but again also remember that this
may be carrying over from not just this planning period for ABAG through 2014 but beyond that
because the hospital build out is beyond that.
Chair Garber: We will go through several ABAG cycles.
Mr. Williams: Right.
Ms. Caporgno: If you are referring to the chart on page four, is that what you are referring to?
Chair Garber: That and the chart on page three.
Ms. Caporgno: Okay because on page four is what shows what our housing allocation is the
2,860 and what we need to provide is 1,869. So the total on the income levels and affordability
on page three that is derived from the Stanford project that is what you are referring to and how
does that fit into the 1,969.
Chair Garber: Right, right.
Ms. Caporgno: Well, I guess if any of those income levels are built under these levels we will
get credit for them.
Chair Garber: They will contribute.
Ms. Caporgno: So if the whole total 1,301 is built or the 1,856 is built we will get credit as much
as we can given our unmet need in the table on page four. Does that make sense?
Chair Garber: Yes, I believe so.
Ms. Silver: IfI may clarify one point there. Our current understanding is that the 1,300 or so
units that Julie just referred to in order to get credit for the ABAG RENA allocation those units
Page 17
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
3O
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
likely need to be located in Pa!o Alto unless there is an agreement between the county and
legislation is passed.
Chair Garber: Understood. Inthe discussion about potential housing sites and approaches the
last line in that section on page five, other potential housing sites could be explored including
General Use Permit sites. Where are we thinking those are?
Mr. Williams: We are not specific about where those are at this point. There are a number of
General Use Permit housing sites that were designated through part of that process. There are
also some sites that were indicated as part of the Sandhill Agreement before. But we are not
specifically targeting any one or other. We are just pointing out there that if it is necessary to use
more than what has been preliminarily shown with the Area Plan as far as the General Use
Permit sites and the one at Pasture and Sandhill and maybe the Red Cross site, if there is need for
more or one of those doesn’t work or depending on how much is required and all that that there
are a number of other General Use Permit sites that could be evaluated but which ones those
would be and how those functioned in terms of Stanford providing the necessary housing to
support its academic Campus growth would be questions we would have to look at.
Chair Garber: All right. We will go through another round here. My suspicion is unless the
Commissioners want to wrap up that we will pick this up again after the next item. Fine, we will
do that. So we will go for another approximately ten minutes.
Mr. Williams: Don’t anticipate we will keep the consultant past this time.
Chair Garber: Okay. So if the Commissioners have questions for the consultant they need to ask
them now. Commissioner Keller.
Commissioner Keller: In terms of you said there were contrhct employees who were considered
for whom Stanford would like them to be regular employees.
Ms. Funk: I was referring primarily to the nursing situation, which now there are a lot of
temporary employees that work for outside contractors that supply the nursing needs. For the
purposes of this analysis they are treated as employees and their incremental needs with the
expansion will be as employees.
Commissioner Keller: So would you expect that if Stanford were to provide housing for such
employees who are in high demand and such housing tied to their continued employment that
would ease the ability of Stanford to recruit and retain nurses and similar staff?.
Ms. Funk: They probably can answer that better than me but one would think so that having
housing would definitely be an asset in recruiting long-term employees.
Commissioner Keller: With respect to a dispersion of employees am I correct in assuming that
you are using the current distribution from the 2000 Census and the transportation data package?
Page 18
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
3O
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
Ms. Funk: To the extent we are using anything. We have pointed out four different ways of
approaching this and there are probably others. Since existing conditions; 2000 is already eight
years old, and it is moving. I don’t think there is a simple expression and answer to what the
dispersion of employees would be unless you predicate it with assuming there is no action,
assuming there is a certain level of action to accommodate housing locally. The market driven
answer is if Stanford and the City of Palo Alto did nothing I would say that you would be under
ten and maybe down six, seven, eight percent would live in Palo Alto because there just simply
isn’t much housing, affordable especiallyl
Commissioner Keller: Thank you. I am wondering whose domain it is to figure out whether or
not Stanford has allocating sufficient space for community healthcare providers. Who is
worrying about that number and I am wondering where it fits into the overall framework?
Mr. Turner: We have not had any specific discussions with the Medical Center folks regarding
displacement of community practitioners and where those practitioners will be going. The
applicants have submitted letters to the City indicating they are working with the community
practitioners to either find a suitable space or discuss leases or rents that perhaps those
practitioners could take advantage of but essentially at this point we are leaving it as a discussion
between the community practitioners and Stanford.
Commissioner Keller: With more beds one would expect there to be more community
practitioners needed. I am assuming that it will at some point come up with respect to
commuting issues. So the amount of community practitioners ties into employment. The .
amount of community practitioners ties into traffic impacts. So understanding whether you have
sufficient number of community practitioner space all those fit together.
Chair Oarber: Commissioners, if I may interrupt because we are going to run out of time I
wanted to get to Commissioner Lippert and Commissioner Fineberg who had questions for the
consultant. Commissioner Lippert.
Commissioner Lippert: In the report do you identify at all rental housing versus for purchase
housing or distinguish in any way?
Ms. Funk: This analysis does not do that. Only by income level and one could extrapolate from
there fairly readily if you chose to but no.
Commissioner Lippert: Is there a way to do that, to have an understanding of how much of that
would need to be rental and how much of it would have to be for sale?
Ms. Funk: There is the affordability approach and then there is the idea! world approach. The
affordability approach usually posits that very low-income households are extraordinarily
expensive and difficult to place in ownership units. If you were to ask very low-income
households they would love to be in an ownership unit. So I think it is both a policy question
and a question that has to be couched in some sort of assumptions.
Commissioner Lippert: Okay.
Page 19
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
4O
41
42
43
44
45
46
Ms. Funk: If you were to ask from a .strictly market demand approach even that is not a
straightforward question. So I think the answer is no, we have not really addressed that question.
Commissioner Lippert: I think if you were to ask the Housing Corporation I believe that they
would prefer to have more for rent units.
Mr. Williams: We generally achieve like Kate was saying low and very low-income housing~
almost by necessity is rental housing. The moderate-income units tend to be ownership.
Commissioner Lippert: I don’t have any questions for the consultant so why don’t other
Commissioners proceed.
Chair Garber: Thank you. Commissioner Fineberg.
Commissioner Fineber~: Thanks. I would like to still focus on going one step back and how
you are calculating that 1,856 number. So if you are starting with the number of new jobs, the
3,200, and dividing it by the 1.72 1 get your ending. So taking a step back to how you calculate
3,200 new jobs I am looking at the Staff Report back on Table 2-2A and I can see across the top
that there are certain numbers of employees for retail, restaurants, hotel, and non-SUMC
providers. That one line, those four numbers, are the variables that basically after you multiply
and divide them by a couple of factors you get the final number. So how do you calculate that
there would be 532 retail employees? How do you calculate that there would be 351 restaurant
workers? Those are the four numbers that then yield the t~nal result.
Ms. Funk: I am going to have to ask for your help in exactly what page you are talking about.
Commissioner Fineberg: Okay, go to page 21 in the Staff R~port, and then turn to the next page.
Ms. Funk: It is not the consultant’s attachment, page 2I perhaps. Okay.
Commissioner Fineberg: So 21 and then turn the next page. It does not have a page number on
it.
Ms. Funk: Right, I think I am with you. So this is Roman numeral -2A and we have 532 retail
employees, 351 and so forth, and the non-SUMC providers. So this is the number of jobs, which
came from the applicant and was confirmed by our own analysis, and that is the big starting
point, the number of jobs. Then the number of households is this 1.72 factor.
Commissioner Fineber~: Understood. So stay with that starting point. What methodology, what
data, or how did you test, or what assumptions did you use to confirm the applicant’s data?
Ms. Funk: Well, let’s start with the Shopping Center it is more simple. We have worked with
many shopping centers and hotels, hotels independently, The density of workers in retai! space
or in hotel space or related to hotel rooms, there is a lot of experience out there with which to say
yes that is reasonable or within the range or it is out of range. In the Shopping Center instance is
Page 20
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
2O
21
22
23.
24
25
26
27
28
29
3O
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
more dense with employment, more employees, because of the high activity and sales volume of
this particular shopping center. If you had a weak shopping center you would have a thinner
amount of employees in the same amount of space. So we felt that the Shopping Center figures
were fine.
Then going to the Medical Center is more the very unique facility that one doesn’t have six
examples with but we have a lot of other medical facilities and other hospitals with which we
could say the density in terms of emp!oyees per square foot was in range or out of range. So that
was one level of kind of quick test. Then when we had the total information on employees that is
when we met with Stanford people and said tell us aboutyour contract employees, maybe your
kitchen staff is all contracted out, how do you do your landscaping, and so on and so on and so
on. They told us about every arrangement that was contract or not and what was in the figures.
By the end of the process of back and forth asking them everything we could think of that would
affect this number we became confident that we were looking at a number of employees that was
as good an estimate as there was that was reasonable from our experience and from everything
we could determine.
Chair Garber: Commissioner Fineberg I am going to have to interrupt your questioning here.
We are going to conclude this item for the moment and we will continue it at the end once item-
number two is completed. Thank you very much. We will take a brief three-minute break and
then we wil! start item number two. As a reminder to those assembled if you would like to speak
you need to fill out a speaker card, which can be found over by the Secretary. Thank you.
Chair Garber: Given the number of cards that I have for people that would like tO speak on the
coming item the likelihood is probably low that we will be able to get back to the conclusion of
the study session that we started. What I am going to suggest to the Commissioners is that at the
conclusion of item number two we do one of two things. Either we go down the row and we
provide comments to Staff and if there are additional questior~s those can be transmitted to
Stanford or alternatively we make a decision to continue the study session to another evening.
The first option, if there are questions for either the consultant or Stanford that those can be
transmitted via Staff. Does that make sense? Commissioner Lippert.
Commissioner Lippert: Or depending on the lateness of the hour we can set a finite time and just
simply allocate a set amount of time per Commissioner to either as questions or make comments.
Chair Garber: Yes, I think that is a good idea. What I wanted to try and do is not force Stanford
to sit all the way througti the next item in order to get there if it is very late. So I am thinking
they can go then we can either make our comments or ask for additional follow up at that time.
Is that acceptable? I have at least one nod of the head. Okay then that is what we will do.
Thank you.
AFTER CONCLUSION OF PUBLIC HEARING
Mr. Williams: I would like to offer a suggestion for your Stanford Housing continuation, which
is that you provide us by email with any additional questions that you have related to that issue
by say October 15 or thereabouts, two weeks, and that we continue it to the October 29 meeting.
Page 21
1
2
3
4
5
6
7
8
We currently have an item on there related to the Public Safety Building that we will bump to
probably November 12 instead. We are going to probably need to have one more, so if we can
get the questions we will provi.de you answers in advance to those questions, and give you an
hour to make any comments that you have on the housing issue.
Chair Garber: Commissioners, is that agreeable? Done.
Page 22
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
Planning and Transportation Commission Meeting
Verbatim Minutes
October 29, 2008
DRAFT EXCERPT
UNFINISHED BUSINESS:
Study Session:
Stanford University Medical Center and Stanford. Shopping Center Expansion Proj ects:
Study Session Regarding Housing Needs Analysis.
Mr. Steven Turner, Interim Current Planning Manager: I do not have a formal Staff presentation.
This meeting is a continuation of the previous discussion on the Housing Needs Analysis for the
Stanford University Medical Center and Stanford Shopping Center Expansion projects that was
held on October 1. At that meeting we had a self-imposed time deadline of the evening at 7:30
and once 7:30 arrived we found out that we still had additional comments from the
Commissioners that wanted to be a part of that review. So a decision was made to continue the
study session to this date and as part of that continuation Staff requested that the Planning
Commissioners submit questions to Staff prior to the meeting so that we could provide answers
and responses to you. We did not receive any questions from the Commissioners so therefore we
don’t have any additional materials for you tonight other than the Staff Report from the last
meeting, which includes the Housing Needs Analysis Report from KMA.
We do not have the consultant here this evening but Staff would certainly be interested in the
Commissioners continuing comments on the study session. Thank you.
Chair Garber: With that let me as the Commissioners if they have any additional comments they
would like to make in regards to this item. Zariah, are there any speakers from the public that
want to speak to this item? Thank you. Commissioner Keller.
Commissioner Keller: Thank you. I would like to start by making a distinction between the
housing impacts of Stanford University Medical Center and the housing impacts of the Stanford
Shopping Center. What I understand is that the shopping center is subject to the standard
housing impact fee that applies to all nonresidential development throughout the city. That is
dually done through a standard nexus study and therefore because that is supposed to cover the
housing impacts of such a development that would indicate to me that there would be no other
additional obligation on the part of the shopping center for housing unless a new nexus study was
done that indicated an updated figure would be required. So let me just address that for the
shopping center.
With respect to the Stanford University Medical Center there was a discussion in front of the
City Council in the last year or two, I don’t remember exactly when it was, but there was a
discussion where a motion was made, an agenda item was made to include the Stanford
University Medical Center and in particular the not for profit hospitals which are currently
exempt from a specific housing impact fee to have that housing impact fee apply to the not for
Page 1
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
3O
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
profit hospitals, namely the Lucile Packard Children’s Hospital and the Stanford University
Hospital. The vote for that was a four to two vote and it requires five votes on the City Council
to pass such an ordinance. So the ordinance did notpass in part because there are only six
members who were on the Council who were not conflicted from dealing with items pertaining
to Stanford. This does not mean that Stanford University Hospital and Medical Center are not
responsible for the housing impacts that they cause in respect to development. What it simply
means is that there is no calculated figured based on a standard nexus study that applies to this
property. What has been understood at least by me and I think everybody pertaining to this is
that this is a matter for the EIR and a matter for the Development Agreement. So I think that
obviously there may be of interest in any developer be it .Stanford or any other developer who
develops within the City of Palo Alto to minimize the amount of expense that they would have to
pay in order to deal with the mitigations for those developments. I would expect no less from
such an august and clever institution as Stanford University to try to minimize the amount that
they would have to pay here. Nonetheless the consideration from my point of view is that the
impacts of this development that are not paid for by Stanford are eitherborne by the residents of
the City of Palo Alto through higher taxes or more expenditures paid for by the residents and
other businesses here or they are not paid for and .therefore the impacts are borne unmitigated by
the residents and other businesses of the City of Palo Alto.
So it seems to me that the issue is that any large development and this is certainly a very large
development using up a significant amount of the nonresidential square footage allotted in the
1989 citywide study that we will be looking at further in the future. Certainly this uses up a lot
of that development and would necessarily have impacts associated with it. It is very interesting
that this is quantified.
The final thing that I would like to bring up at this juncture is that there is some statement to the
effect that when you do a large development in City A a number of the people residing in other
cities work for the development in City A. If eight or nine o~ ten percent of the people who work
for Stanford University Medical Center live in Palo Alto and 90 percent of them live elsewhere
in general then that should say by some claim that this would mean that only ten percent of the
housing impacts resulting from Stanford University Medical Center’s development should be
mitigated by Stanford. Well, that makes no sense because the same thing should be done for any
other city. So if City B, Menlo Park, Mountain View makes a big large development and they
only mitigate ten percent of their development then we would have uncovered mitigation for the
portion of the large developments in other cities. For example, the Google-plex in Mountain
View, well I am sure a lot of those people live in Palo Alto such as the founders of Google live in
Palo Alto. There are other people who live in Palo Alto who work at Google. So the question is
if there is some for which Google is supposed to mitigate does that mean that they don’t mitigate
the development in Palo Alto? Well, it essentially means that if you mitigate all of your own
impacts, if every city mitigates all of their own impacts then the consideration that makes sense
is that you are sort of reciprocally mitigating the impacts for the other cities that affect you. So
in some sense this is a situation where it does not makes sense to mitigate only the expected
number of people who live in Palo Alto because we are putting that impact on other communities
and they would be likely to do the same. That doesn’t make sense: What makes sense is to
mitigate the impact of the development within Palo Alto for the expected number of residences
that are appropriate that wouldn’t otherwise be covered. For example if you have high income
Page 2
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
3O
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
1 people the standard development of housing within Palo Alto that cover high-income people
2 would be appropriate. But for people who are of lower income, the moderate income, and below
3 moderate income, below market rate income housing that is a significant impact. That certainly
4 makes sense to me to cover bedause ABAG will basically tell us we need to have more be!ow
5 market rate housing precisely because of the increase of these kinds ofjobs. So it makes sense to
6 me that we should mitigate it both from the point of view of the ABAG numbers, we should
7 mitigate it both from the point of view of taking care of your own impacts that are caused and
8 not expecting other cities to take care of it because they are not going to take care of it for us
when they do their development this way. So we have to take care of our own so as to avoid
increasing the impact. Thank you.
Chair Garber: Forgive me for asking, in your second point am I understanding you to say that
for instance the potential pool of people that would be working in the Stanford Hospital or in that
development are going to come from beyond, some will come from within but many will come
from beyond Palo Alto’s borders, but Stanford should be made to acknowledge the mitigations
that have to be done for that entire pool not just for Palo Alto?
Commissioner Keller: Yes. I am saying that Stanford should be dealing with the housing impact
of that development and whether those people choose to live in Palo Alto or choose to live
elsewhere they are providing that impact. On the other hand if Stanford wishes to build a whole
bunch of housing in East Palo Alto as mitigation for this development in Palo Alto, if they want
to do that below market rate housing, and they get approval from ABAG to have that count
towards our allocation or in Mountain View or some other city I would be fine with that. So the
issue is it is fine with me for Stanford to actually build that housing. If they do it in Palo Alto or
they do it in another city to mitigate this impact provided we get credit for that housing as part of
ABAG and there are I understand provisions for building housing within other cities to do offsets
and getting credit for it through the ABAG process. If they want to do that, fine. Otherwise
build it here. ,
Chair Garber: Is it common practice to have sort of chains of mitigations through cities? ,4
project may impact one community but it also impacts other communities and ties those things
together?
Mr. Curtis Williams, Interim PIanning Director: There are a lot of projects that have impacts in
other communities but there is not a requirement through CEQA to make those - you cannot
require mitigation for all of those kinds of things. You can require it within Palo Alto but you
are pretty limited on what you can do beyond that. In some cases that engenders lawsuits like
with Menlo Park over the Sand Hill project and the fact that there are roads that impact Menlo
Park and their neighborhoods and such. So there were issues there and a city can require certain
things to be done within the city but there were points beyond that that we didn’t have the
authority. It was outside of our jurisdiction to require that some other intersection be improved
or something like that. So it is pretty limited as far as what we can do to mitigate impacts on
other cities or Santa Clara County in this case.
Chair Garber: Actually ifI may let me ask Commissioner Lippert who had a light on and then
we can come back. Is yours a follow up or do you mind? Let’s let Lee go and then you.
Page 3
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
3O
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
Commissioner Lippert: Just following up on Commissioner Keller’s point there if the
Development Agreement called for these housing units to be built they would have to built
whether they were built in Palo Alto or some other community in order for them to comply with
the Development Agreement. Is that correct?
Mr. Williams: Well, the Development Agreement would probably be specific about where they
need to be built. In fact, it would probably have to be specific for the EIR to cover. If that was
part of the Development Agreement then we would have to look at the impacts of constructing
that housing as part of the overall EIR so it wouldn’t be as nebulous as you have to build this
much housing.
Commissioner Lippert: If that is the case, following up on the nexus of what Commissioner
Keller, then Stanford Medical Center or Shopping Center they would come forward and say we
are going to build so many units of housing and it will either be in Palo Alto or they will name
another community. Then those housing units would need to be built or completed at the time
that the Development Agreement went into effect or?
Mr. Williams: A Development Agreement is an agreement between the City and the applicant-so
they would have to agree to construct housing in a certain manner and timeframe, etc. All that
would have to be part of the Development Agreement.
Commissioner Lippert: Okay. Then just as one other follow up on that, could they simply be the
financing behind a housing project?
Mr. Williams: They could, the range for what Stanford would be responsible for here is
everywhere from nothing to everything as far as the possibilities. So there is a fine balancing as
far as what we believe is necessary to substantially address some of these housing needs issues
versus what becomes overly burdensome in respect to the project or the balancing against the
other benefits of the project etc., etc. So they could be financing, they could be providing land,
they could be constructing housing, the City could determine that they shouldn’t have to do
anything and that it is the public’s responsibility to provide that housing, and that is why we are
trying to get some sense of direction. I think Commissioner Keller has essentially said that it
sounds like at least the affordable unit kind of component of this should be more specific about
what the responsibility of the applicant is whether that is full construction or whatever but that is
a starting point as far as what we would be looking at here. that is what we are looking for your
input on tonight is kind of what kind of approach do you think is appropriate given the numbers
that you see here from KMA and knowing the sort of reality of trying to produce affordable
housing is an expensive proposition.
Commissioner Lippert: Okay. Thank you.
Chair Garber: Commissioner Lippert, if you have other questions or comments feel free and
then we will just go down the line.
Page 4
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
3o
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
1 Commissioner Lippert: Sure. I guess there is no such thing a free housing. It is not as though I
2 am looking at this housing being built and being given away to the employees that would be
3 working at the Medical Center or the Shopping Center. What I am looking at is a way in which
4 this would move forward in a #ery positive way. If you think about the current market the way it
5 is right now in terms of the economy and the housing bubble bursting getting financing for
6 housing is a very difficult element by itself. So if the Medical Center were to build housing, if
7 the Shopping Center were to build housing one way to go about doing that is to identify certain
8 key sites that are already zoned for housing, multi-family housing, and simply financing those
9 with the thought that the employees at the Shopping Center and the Medical Center would be the
residents there. So that is basically my point of view or mY thoughts about it. We are in a very
tough economic situation right now. On the other hand, housing prices are down and so being
able to find homes might be a little bit easier but definitely I think these numbers are fair and
they should be addressed in the Draft EIR. I think they are reasonable to ask that those units be
built in conjunction with the project.
Chair Garber: Thank you. We will just continue down the line. Commissioner Fineberg.
Commissioner Fineberg: I would like to follow up on Commissioner Keller’s comments. If
Staff could take a step back into some definitions of what ABAG does when there are changes in
jobs in the City because I think there should be some consistency with what mitigations we
require or attempt to have Stanford provide in the Development Agreement, there should be
consistency with that and what ABAG will require of the City. So let’s say in theory there is a
site that adds 100 jobs in Palo Alto. What will ABAG’s response be in terms of their down the
road requirement for additional housing?
Mr. Williams: I am going to let Julie respond to that question. I did want to clarify before she
does that though that we have referred both to the EIR and mitigation measures as well as the
Development Agreement in these discussions. We really see’this as probably being primarily an
issue in the Development Agreement. The EIR is not likely to find that as a mitigation measure
it is necessary to provide housing to mitigate it in any real substantial way. So it is primarily the
Development Agreement that is the mechanism through which we would be implementing this
or making any requirements of the applicant.
Ms. Julie Caporgno, Chief Planning and Transportation Official: To get to Commissioner
Fineberg’s question about the ABAG and jobs, ABAG looks at everything very generically
generally. A new project coming along with 100 jobs we don’t consult with them or they won’t
comment on that. Even the size of the Stanford Medical Center and Shopping Center projects
the amount of growth or employment we did check with them because we had our projections
and would this fit within that number or would we have to assume that they are going to increase
that number and they said no, it fit within the realm of the employment that they projected for
growth within the timeframe that the hospital and the Shopping Center will expand. So the
ABAG numbers, the employment numbers really shouldn’t be affected as long as or unless
hundreds of thousands of new square footage were added or something outrageous. In this
particular amount of square footage and employment that falls within the range of about 6,000 or
7,000 employees that they would assume to be added to our growth in the next ten years.
Page 5
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
3O
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
Commissioner Fineber~: Okay. So I used 100 just because I can do math with little numbers.
So let’s say that ABAG has captured the growth that they anticipate will occur at Stanford. So in
our number that ABAG is look!ng at is some number of these Stanford jobs. Will ABAG come
back to the City and say therefore Palo Alto needs to fully mitigate the impact of those new jobs
or has ABAG already done a calculation saying, I am going to use round numbers, if they have
said that 3,000 new jobs at Stanford they get that only ten percent would be here in Palo Alto. I
am making these up so I can multiply. Have they only increased our housing requirement by ten
percent of 3,000 or is ABAG going to come back and say Palo Alto must provide half of that
because half of the workers will live in Palo Alto and half won’t? Or will they say we have to
provide 3,000 new homes?
Ms. Caporgno: They are looking at everything very regionally. So they are saying that Palo
Alto within this timeframe is going to add about 6,000 jobs. Where those jobs are located they
didn’t look at it. The 3,000 jobs fall within that range so as far as they are concerned that is
acceptable. The housing units that we have been projected to provide also would accommodate
that. There is a balance there of that additional job growth and the additional housing growth
that they are anticipating or they are projecting that we would be responsible for. So we checked
with them a couple of times. We don’t have anything unfortunately in writing but we did talk to
them. When we first got our Projection 2007 the medical facility and the shopping center
projects were not known. We did talk to them and they confirmed that yes this wouldn’t affect
the projections and won’t affect subsequent projections. They are not going to penalize us when
we get the Regional Housing Needs Assessment for the next period.
Commissioner Fineberg: Okay. So 6,000 new jobs and then 2,000 new homes. So do they have
to mitigate one-third?
Ms. Caporgno: There are projections for us. I would have to go back and check. We checked
on the jobs I would have to go back and check the housing. ]~t was higher than what we were
anticipating the City wouId provide but they were not adding additional housing because of the -
or the housing that they were projecting would accommodate the 6,000 jobs. Where those jobs
are located was not instrumental to them.
Commissioner Fineber~: Okay. So ifI get it, on the global ABAG analysis we have 6,000 new
jobs, they want us to build roughly 3,000 new houses, so that means they are requiring us to
mitigate half the impact. Yes? No?
Ms. Caporgno: Again, they are looking at this regionally. So the 6,000 new jobs there may be
two jobs per household so that would be 3,000 households. I think they assume regionally 2.5
jobs per household or maybe 1.7 jobs per household. So I would need to go back and look at all
the figures and Roland is unfortunately not here. Generally speaking, the jobs that we have
identified the housing would accommodate those jobs that they are projecting. I don’t think it is
a one-for-one estimate because again they are looking at regional growth. As far as this project
they do not think that there will be any additional housing or jobs required for it.
Commissioner Fineberg: Okay, thanks. All right, a quick question about the Staff Reports. I
noticed in the courtesy copy listing at the back that none were indicated to be going to our
Page 6
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
!6
17
18
19
20
21
22
23
24
25
26
27
28
29
3O
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
neighboring cities. Is Menlo Park at a minimum, and possibly other cities like Los Altos, getting
copies of this? If they are not, I think it might be a friendly and beneficial thing for us to
advising our neighboring cities, of these reports.
Mr. Turner. We will make sure that they are in receipt of the report.
Commissioner Fineberg: Thank you. I have another question. Is the consultant from KMA here
tonight?
Mr. Williams:
Chair Garber:
No, they are not.
Yes, please.
If I could through the Chair just make a comment.
Mr. Williams: This study session is scheduled until seven o’clock. We had indicated at the end
of the last study session that this would be an opportunity to make comments and that if there
were additional questions that we had hoped that they would have come in about a week ago so
we could try to respond to them in the Staff Report. I just want to indicate that you have about a
half hour left to provide us with comments. That is why we didn’t ask the consultant to come
back for questions.
Chair Garber: Thank you.
Commissioner Fineberg: Okay, so this is more of a concern than a question. I am concerned
that the current methodology that is being used in the Staff Report is undercounting the workers
by just counting Stanford employees. It discusses a multiplier effect and it says it is not using a
multiplier. Thatis on page 38 of the report. I would agree that when you have - let’s say there
is building A as an existing building with 100 employees. You build building B and 150 people
can sit in it. If the 100 people move into building B from A tb B, then you have 50 new
employees. If you teardown building A you onlyhave 50 new employees. If you take 100
employees and put them into building A so you have one building that you repopulate and one
building that you populate the 150 you have net 150 new jobs. So unless you teardown a
building somewhere that new construction is all new jobs. So can we confirm that there is
anything being torn down on Stanford Campus that will be emptied so that everyone moving into
the new facilities is not just new jobs? I hope that makes sense. If there is nothing being torn
down then all the new construction is new jobs. If you are building a building that holds 150
people and 100 move from another location, and you backfill, you have 150 new jobs. The
methodology I see being used is saying there are only 50 new jobs because it is an expansion of
50 jobs, but it is an expansion of 50 only if you teardown the old building. So are all the old
buildings being torn down or are some of those old buildings remaining and being backfilled and
there is additional growth we. are not counting?
I woutd agree we don’t have to count if there is a doctor that moves to town and hires a gardener
and his gardener’s kids go to preschool and there is a preschool teacher. We don’t have to get
two and three generations out. That is where she is talking about the multiplier effect. I think
we need to make sure that if the buildings don’t get torn down that we count the net new not just
the differential.
Page 7
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
I am also concerned that it might only be counting direct employment. So for instance in the ER
it is often a practice to subcontract to an outside firm to have emergency room doctors. So there
might be 50 doctors in there that might choose to live in Palo Alto that will be driving on the
streets, but if they report to a firm and it is subcontracted out are we missing them in the count?
That was it.
Chair Garber: Thank you. Commissioner Holman.
Commissioner Holman: Thank you. I thought I only had comments as opposed to questions but
I was prompted to think of a question that is probably for Julie Caporgno having to do with the
EIR. It was spurred by a comment made by Curtis about the EIR won’t determine a need for
housing or won’t evaluate a need for housing ifI understood correctly. So I am was hoping or I
guess maybe I assumed that at least in an indirect fashion that CEQA had progressed a little bit
further because CEQA does consider now greenhouse gas creation. Of course if housing isn’t
provided nearby then there are trips. So I thought maybe not in a direct but an indirect fashion at
least housing would be addressed in that fashion.
Mr. Williams: Thank you, Commissioner Holman that is a very good point. CEQA does not -
generally treat the housing need or housing being generated as a need sort of region-wide as an
impact that the City necessarily has to mitigate but it does look at say the jobs/housing balance
and how it affects that and may have some mitigation for that. But the other area where it does
come into play is, and we have talked to you before about this village concept, so there may be a
housing component of that or there will be a housing component of that alternative that has some
mitigation value from an internal traffic standpoint and that kind of thing. So there will be some
of that there and it will relate to the KMA report to some extent at least. So I am mistaken in
terms of probably understating that CEQA has some role in this. I still think that the ultimate
determination of precisely what we require from Stanford to be contributed in terms of a housing
component will primarily be enumerated in the Development Agreement but it will play into the
environmental document as well.
Commissioner Holman: Thank you for that clarification. That leads to my comments.
Somewhat akin to Commissioner Keller and Commissioner Lippert’s comments earlier I have
concern about leaving the housing discussion for the Medical Center to the Development
Agreement because one of the purposes of Development Agreements is to identify public
benefits. Now it can be argued that the Medical Center in itself is a public benefit and that
certainly has been argued by the applicant and I am not going to challenge that but to say that
there have been questions asked and not yet answered and surely will be that more clearly this is
a regional facility and indeed how many local persons actually have practical access to the
Medical Center located even as close as it is because of a variety of reasons. So given that,
housing creation - I have this serious concern that the housing demand creation that the projects
will create could put a huge financial burden, back-breaking financial burden on the City of Palo
Alto if we don’t have some way of addressing this as mitigations as opposed to simply public
benefits, as they might be called, in a Development Agreement. So that is a very serious and
large concern that I have. It is one of the biggest that I have. So in other words, I don’t want the
Page 8
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
4O
41
42
43
44
45
46
creation of housing to become the bargaining tool when it is the projects themselves that create
the demand for that housing.
Then another thing is that it is ~lso important that the phasing of housing creation be very clearly
indicated because we could end up with, as happens with some projects here, there and
everywhere, that the impacts are created because of development but the mitigations or housing
needs are not constructed for a number of years. So the timing of that and the phasing is
absolutely critical to maintaining a quality of life.
This will come up again - actually I will skip that one for now. Going back to housing demand
and going back over the minutes from our last study session as I understood them at the meeting
and then going back over the minutes from that meeting the prospective as represented by Jean
McCown was that the housing would be created in a variety of communities and not necessarily
Stanford, not necessarily Palo Alto. That again raises the huge ABAG consideration. Also, what
were not raised at all were the CO2 impacts of that. What communities are we going to be
imposing impacts on as a result of this project? Which goes then to another comment that has
been made previou~sly that some information has been very sparse coming to us, I will sound like
a broken record on this about an updated timeline but also the Commission has asked over time
to be informed of other public meetings like with especially the City of Menlo Park because they
are probably going to be more impacted perhaps than any place else, and perhaps East Palo Alto.
I have not noticed any notifications of public meetings about these projects that have been held
with those other communities or any kind of comments coming back from them. So I think as
we look at these projects it would be helpful to have their comments to edify us as we go along.
I think that is it for me for now.
Chair Garber: A couple of quick ones for me and then we will go to Paula. I think we have
heard pretty clearly that, well I am not sure we have heard it clearly so let me try stating it this
way. The principle of development of the housing or the hou’sing that is assigned as the
mitigation for this project should be developed out of the impacts that Stanford creates as
opposed to trying to set a target based on our ABAG numbers. I think that is an important’
distinction to be made here, which isn’t to say that we shouldn’t be receiving and tallying that
housing such that it can contribute to our ABAG numbers, especially when it happens on the
regional level not just in Palo Alto. I think the other thing that we have clearly heard is that
hospitals may in fact be exempt from the housing requirements but that doesn’t relieve the
hospitals from being responsible for their other impacts as I am understanding this.
Finally, there was the section about potential housing sites or targeted housing sites. I think only
one of them was in Palo Alto proper over by the Red Cross land. I would be interested to learn
what the impacts would be, I am saying impacts here not on a development or EIR way, but what
the pros and cons are would be to consider other sites within Palo Alto. Also, relative to the Red
Cross site that is not one site that I would find particularly good for location of a housing project
only. I think that site in particular has other roles that it needs to perform for the city and should
be performing in the future. Commissioner Sandas.
Commissioner Sandas: Thanks. Since I didn’t have the opportunity to be a part of the
conversation four weeks ago I am seeing this from a little bit of a different angle. Personally, I
Page 9
11
12
13
14
15
16
17
18
19
2O
21
22
23
24
25
26
27
28
29
3O
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
1 am less concerned about ABAG and I am more concerned about the transportation aspect that
2 goes along with where people live wherever that is. Whether housing is developed in
3 communities outside of Palo Alto as a result of the new jobs being created at SUMC and the
4 Shopping CentEr or not. Not everybody wants to live right where they work. We can’t make
5 that assumption and in reading the minutes from the last meeting I note that that assumption was
6 specifically not made. That only a small percentage of people may live where they work
7 regardless of the price of the housing. Because we can’t assume that families are going to uproot
8 from the communities where they live because one person has a job at Stanford I am more
9 concerned with how the traffic demand is going to be managed. That to me is a critical
10 component of this. Whether Stanford chooses and part ol~the Development Agreement is that
housing is going to be built at a certain corner of Palo Alto, how are we going to ensure that
people have a way to get to work through the streets of Palo Alto that doesn’t involve clogging
them up with more cars.
The other thing about developing more housing that we continue to grapple with in our
community is we build more housing, well again there are the ripple effects that I think
Commissioner Fineberg was alluding to. Not only is there the ripple effect of children in
preschool, and more preschool teachers, and more whatever, but the City infrastructure ripple
effect that we keep talking about. Housing demands more schools, demands more libraries and
parks, and all the other services that the community provides. So having come from an angle not
directly out of the conversation from last time my concern is with transporting people from
wherever it is that they live whether it is in the village or outside of it.
Chair Garber: Commissioners, we have 12 minutes. We will go down through the line again
starting with Keller, Lippert, Fineberg, Holman, and myself again. If you would limit your
comments to about two minutes, thanks. Commissioner Keller.
Commissioner Keller: The first is I have never gotten a satisfactory answer as to whatthe
baseline is for the number of rooms and the employment at the Lucile Packard Children’s
Hospital. The 2007 number of patient beds was 216. I keep on seeing 257. I would like to
know what the real baseline is and I would like some consistency about that because as far as I
understood in 2007 when the baseline there weren’t 257 beds occupied at the Children’s
Hospital.
I am not sure this is a good idea but just bring it up, it might be worthwhile considering the issue
of if you consider Santana Row as a shopping center in San Jose with housing. I am wondering
whether there are any ideas about that or similar to that that are comparable for the village
residential complex.
I am actually quite surprised with the figure on page 11 of 100 non-Stanford University Medical
Center providers. That seems rather low to me considering that we are talking about an increase
at least in oneTthird of the number of beds. So is there a claim that there are only 200 physicians
located nearby? I am not sure if that is the right number but I would like to see clarification of
that.
Page 10
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
With respect to Chair Garber’s comment about the Red Cross land I would certainly agree that
that is not suitable location for housing. I think if we get a high-speed rail station in Palo Alto
that is a much better place to think about a hotel and some sort of complex associated with that
location.
To the extent that the land along Quarry Road is used for housing beyond the housing that is
used for mitigating the Stanford County General Use Permit then we should consider annexation
of that land which would also put that housing within Palo Alto and take care of that for handling
our ABAG numbers.
I think that recruitment of employees having housing for employees at Stanford particularly for
nurses, which are really hard to hire these days, would seem to be a benefit for Stanford.
Finally, the issue is Commissioner Sandas brought up the consideration of transportation. I note
that the Valley Transportation Authority has been continually cutting service to Stanford and
actually does not service Stanford University at all. Just the 35 bus covers the shopping center, I
would encourage us to work together collectively with the VTA to have more buses go to cover
at least the Medical Center. Thank you.
Chair Garber: Commissioner Lippert.
Commissioner Lippert: Going a little further with my last go around, in terms of targeting
specific groups here I would say that probably the very low and low-income housing I would
think would be desirable to be located in Palo Alto environs and the City proper is not near the
boundary. Part of it is that I think when you get into that income level it is going to be far more
difficult for that group of people to travel great distances. It is desirable I think to have that in
the city and perhaps what might be along the lines of the suggestion I have with financing is
maybe Stanford pay into the Palo Alto Housing Corporation and have more affordable housing
built by the Palo Alto Housing Corporation and allow the people in those income groups to be
able to be selective as to which housing developments they live in.
With regard to the more moderate and above moderate I don’t have a problem with the people in
those income groups living outside the community. A lot of them will live in the community
anyway but perhaps Stanford can do something with regard to again the financing or helping
those people to secure mortgages.
Chair Garber: Commissioner Fineberg.
Commissioner Fineberg: I have just one super quick question before my comments. The
hospital is exempt from having to pay a pre-defined mitigation fee. Does that same exemption
apply to the mall?
Mr. Williams: No it doesn’t. The Shopping Center is subject to that fee. Hospitals are
exempted from that fee as Commissioner Keller pointed out there was a consideration and there
were not five votes at the Council to impose that fee but the discussion at the time was that the
housing issue would be dealt with as part of the Development Agreement for the project.
Page 11
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
3O
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
Commissioner Fineberg: Okay. So even though the process and the analysis and the EIR will be
running on a single track there .will be very different handling of the mall will pay a mitigation
fee and the hospital is a separate negotiation in the Development Agreement. Okay.
Mr. Williams: That is what we anticipate.
Commissioner Fineberg: I would concur with a lot of the comments that Commissioner Keller
said and I would like to also add that I think it is going to be important and not an issue for
tonight but where those houses go will be significant. The Staff Report indicated the four
locations that Stanford has on their General Use Plan indicated for housing and I think it is going
to be critical that the housing get located in the right places. We talked at our last meeting about
the idea of village residential and having the opportunity to connect the Downtown shopping are
with the Shopping Center and having it be a wonderfully walkable experience, and building
houses in the middle of that might throw in wrench in what could be a lovely pathway. So
making sure that that gets handled in a way that enhances the final development I think will be
important.
Chair Garber: Thank you. Commissioner Holman.
Commissioner Holman: Just quickly the Red Cross site, the Commission majority if not all of us
had said nix to that as a housing site previously.
Building the housing versus impact fees that is always I think that the Medical Center and
Shopping Center ought to be responsible for actually building the housing because sites are such
a difficulty and availability of sites, the timing and cost escalation that happen, sometimes it ends
up being a money losing proposition to accept fees.
There was a good deal mentioned in the consultant’s talk last time about part-time versus
fulltime employees. That also affects the housing needs. While this is the prerogative of the
Medical Center, and Shopping Center for that matter but certainly the Medical Center, while it is
their prerogative how they do business I think if they could consider shifting those or some large
number of those to fulltime employees they could help themselves a whole lot when it comes to
the housing needs that are generated, in addition to the traffic that that would generate.
The village concept, we keep coming back to that but I am pressing the village concept, which
would again create the housing and minimize the trips. Maybe lastly or next to last comment
community facilities it is true as Commissioner Sandas said the more housing we create also the
more demands we have on community facilities. So that is the secondary impact of creating
more housing and another reason why if Stanford can shift from whatever their reasons are and
one can guess but they can shift from some of their part-time to fulltime that would help. Then
the last comment I will make for now is this really is an opportunity for Stanford and Palo Alto
through this whole process whatever size project ends up getting built to really create not only a
world-class shopping center and a world-class medical center but really enhance and improve on
a world-class community as opposed to putting potentially burdens on a community. At the risk
of maybe stepping on anyone’s toes this university is one of the largest and most successful
Page 12
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
3O
31
32
33
34
35
36
37
38
39
40
41
42
43
44
fundraising entities in the entire nation, so if we can’t come out of this with a project that is
going to be to the benefit of everyone as a part of this negotiation then shame on us all.
Chair Garber: Commissioner ~andas. No comments from Commissioner Sandas. Finally, we
will see this again when?
Mr. Williams: Well you will see some components of it with the Draft EIR when it comes out
including the village alternative and then some of the housing and population analysis. Then you
will also see it subsequently with the Development Agreement as well.
Chair Garber: Will there be an opportunity, should there be an opportunity, for us to see and
provide input on the actual algorithm that is developed that calculates the number of housing and
the types of housing that would be proposed for Stanford as part of our Development Agreement
or any other agreement?
Mr. Williams: I don’t think that is planned at this point in time. I think you will see what we
propose in that regard and then be able to have input to that as part of both of those other
documents. I don’t think the schedule would allow us to have those additional steps in there ~as
well.
Chair Garber: Commissioner Holman.
Commissioner Holman: There are as a part of these study sessions there are a whole laundry list
of questions and comments that get generated, questions and comments that surly are itemized
for consultants and for Staff. Would it be possible for Commissioners and Council Members to
also get copies of those iterations of those lists? It would help us to keep track and keep our eye
on the ball.
Mr. Turner: I think to the extent possible we will be going through the various study sessions
and meetings we have had with all of the Boards and Commissions, Architectural Review Board,
Planning Commission, and City Council, and pulling out those questions, pulling out those items
that each of those Boards want clarification on. So we anticipate that we will be,needing to do
some strategizing on how to address all of those comments that we have reeeived over the past
18 months or so and perhaps a way to do that would be to compile those into a document that can
be easily referenced. So we will attempt to do that the best that we can.
Commissioner Holman: Not looking for answers to all of them at this point just a list of the
questions and issues.
Chair Garber: With that let’s conclude, o.ur study session on the Stanford University Medical
Center and Stanford Shopping Center projects. It looks like about 7:01 on the clock. Let’s take
a brief two-minute break and we will switch out our Vice-Chair and start the next item.
Page 13