HomeMy WebLinkAboutStaff Report 1825City of Palo Alto (ID # 1825)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 6/20/2011
June 20, 2011 Page 1 of 4
(ID # 1825)
Council Priority: {ResProject:ClearLine}
Summary Title: 2nd Reading SUMC Project Ordinances
Title: Adoption of a Resolution Approving the Reorganization of an
Approximately .65 Acre Territory Designated “Major Institution/University
Lands” Located in the County of Santa Clara and Second Reading for the
Adoption of Two Ordinances: (1) Amendment of Title 18 of the PAMC to add a
new Chapter 18.36 (Hospital District), adding Section 8.10.95 (Tree Removal in
HD Zone) to Chapter 8.10 (Tree Preservation and Management Regulations) of
Title 8 (Trees and Vegetation) and amending Section 16.20.160(a)(1) (Special
Purpose Signs) of Chapter 16.20 (Signs) of Title 16 (Building Regulations) and
amending Section 18.08.010 (Designation of General Districts) and Section
18.08.040 to Chapter 18.08 (Designation and Establishment of Districts) and (2)
Approval of a Development Agreement Between the City of Palo Alto and
Stanford Hospital and Clinics; Lucile Salter Packard Children’s Hospital at
Stanford; and the Board of Trustees of the Leland Stanford Junior University
From:City Manager
Lead Department: Planning and Community Environment
RECOMMENDATION
Staff recommends that the City Council:
1.Adopt the Resolution approving the Reorganization of an approximately .65 Acre
Territory Designated “Major Institution/University Lands” Located in the County of
Santa Clara (Attachment A);
2.Conduct a second reading and adopt the Ordinance Amending Title 18 of the PAMC to
add a new Chapter 18.36 (Hospital District), adding Section 8.10.95 (Tree Removal in HD
Zone) to Chapter 8.10 (Tree Preservation and Management Regulations) of Title 8 (Trees
and Vegetation) and amending Section 16.20.160(a)(1) (Special Purpose Signs) of
Chapter 16.20 (Signs) of Title 16 (Building Regulations) and amending Section 18.08.010
(Designation of General Districts) and Section 18.08.040 to Chapter 18.08 (Designation
and Establishment of Districts) (Attachment B); and
3.Conduct a second reading and adopt the Ordinance Approving a Development
Agreement Between the City of Palo Alto and Stanford Hospital and Clinics; Lucile Salter
June 20, 2011 Page 2 of 4
(ID # 1825)
Packard Children’s Hospital at Stanford; and the Board of Trustees of the Leland
Stanford Junior University (Attachment C).
BACKGROUND
On June 6, 2011 the City Council certified the Final Environmental Impact Report for the
Stanford University Medical Center Facilities Renewal and Expansion Project (“project”) and
approved a series of land use entitlements related to the project. These entitlements included
a Comprehensive Plan Amendment to exempt the Hospital District from the citywide and area
specific non-residential development caps and to permit higher buildings in the HD zone; the
creation of a new Hospital District Zone; a Conditional Use Permit for the major components of
the project and a Development Agreement which would lock in the entitlements for a period of
30 years in exchange for a mutually acceptable package of community benefits.
The Council also requested that the Development Agreement be revised to include language
consistent with the agreement between the City of Palo Alto, the SUMC project applicants, and
the City of East Palo Alto, for payment of specific fees related to traffic improvements at
University Avenue in East Palo Alto and a payment if the SUMC project sponsors are unable to
achieve the 2025 transportation mode-split target as described in the Mitigation Monitoring
and Reporting Program, mitigation number TR-2.3.
DISCUSSION
Annexation
In order to ensure that the site is located entirely in Palo Alto and to ensure compliance with
the Tri-Party Agreement between the County, City and Stanford regarding the use of medical
center land, an annexation is required. On June 6, Council initiated the annexation proceedings
by adopting a resolution setting the date of June 20, 2011 to conduct a meeting on the
annexation of a 0.65 acre site from Santa Clara County. The City of Palo Alto is the lead agency
for annexation proceedings. The property to be annexed is solely owned by Stanford
University. No objections to the annexation have been received by the City. To complete the
annexation, the City must adopt a Resolution Making Certain Findings (Attachment A).
Zoning Ordinance
Given the unique and complex characteristics of the project, a new Hospital District was added
to the Zoning Code. No substantive changes were made to the ordinance since Council’s first
reading on June 6. For convenience, a copy of the ordinance is included in this Staff Report as
Attachment B.
The Development Agreement-East Palo Alto Traffic Issue
Prior to the June 6, 2011 Council meeting, City of Palo Alto staff, the SUMC project applicants
and representatives from the City of East Palo Alto held a series of meetings regarding
transportation-related impacts in the City of East Palo Alto. The Final EIR prepared for the
SUMC Project concluded that there were no significant traffic related impacts in East Palo Alto.
The traffic study prepared for the Final EIR included a level-of-service (LOS) analysis for East
Palo Alto intersections, including Woodland/University, University/Bay, and
June 20, 2011 Page 3 of 4
(ID # 1825)
University/Donohoe. It was determined that with the full build-out of the project in 2025, these
intersections would continue to operate in a manner that would not trigger CEQA-impacts.
Although East Palo Alto representatives have accepted the Final EIR conclusions, they have
argued that there would be perceived impacts from the SUMC Project, in that many East Palo
Alto intersections currently operate poorly and that these intersection’s LOS would continue to
deteriorate over time, even if the SUMC Project’s contribution does not trigger a CEQA impact.
Representatives from East Palo Alto requested payments from the SUMC project applicants and
the City of Palo Alto to address the perceived traffic impacts.
In response to East Palo Alto’s request, at the June 6, 2011 meeting the City Council directed
staff to incorporate the following additional provisions into the Development Agreement:
1.The Hospitals shall make a payment of $200,000 to the City of East Palo Alto for
roadway and traffic signal improvements scheduled to be done on the length of
University Avenue within the East Palo Alto city limits. This work includes repaving and
restriping/bike lanes to improve both vehicular and non-vehicular traffic flow.
2.In the event the SUMC Parties are unable to meet the trip diversion goal set forth in this
Agreement such that the $4 Million penalty payment is triggered, the City of Palo Alto
shall remit $150,000 of the penalty payment to the City of East Palo Alto.
The revisions Council directed are incorporated into Section 5(c)(iii) of the Development
Agreement (Exhibit A to Attachment C). Approval of a Development Agreement is a legislative
act which becomes final 31 days after the second reading of the Ordinance approving the
Development Agreement. (Attachment C.)
NEXT STEPS
The ordinances would be in-effect 31-days after the second reading, which would be July 21,
2011.
The SUMC project applicant is expected to begin minimal site preparation at Hoover Pavilion
for the building renovation activities within the next few weeks. This may include installation of
protective fencing and minimal tree protection and relocation preparation work.
The parties are also negotiating an agreement that would permit Stanford to relocate the major
utility infrastructure servicing the project from the SUMC site to underneath Welch Road. This
relocation will facilitate better site planning and avoid possible construction impediments. Also
as part of this agreement, the City plans to upgrade the capacity of its gas line in this area. Staff
will bring this agreement to Council for approval shortly.
ENVIRONMENTAL REVIEW
The City Council certified the FEIR for the project on June 6, 2011.
June 20, 2011 Page 4 of 4
(ID # 1825)
ATTACHMENTS:
·Attachment A: Annexation Resolution (PDF)
·Attachment B: HD Zoning Ordinance (PDF)
·Attachment C: Ordinance Adopting Development Agreement (PDF)
Prepared By:Steven Turner, Advance Planning Manager
Department Head:Curtis Williams, Director
City Manager Approval: James Keene, City Manager
*NOT YET APPROVED*
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Resolution No. _____
Resolution of the Council of the City of Palo Alto Making
Determinations and Approving the Reorganization of an
Approximately .65 Acre Territory Designated “Major Institution/
University Lands” Located in the County of Santa Clara on the
Northwest Side of the Main SUMC Site Adjacent to Pasteur Drive
(APN: 142-05-031)
WHEREAS, a petition for the annexation of certain territory to the City of Palo Alto and
detachment of said territory from the County of Santa Clara, consisting of 0.65 acres on the
northwest side of the Main SUMC site adjacent to Pasteur Drive (APN: 142-05-031) has been
filed by the owner of said parcel; and
WHEREAS, on June 6, 2011 the City Council adopted Resolution No. 9170 initiating
proceedings for annexation of the area designated as “Major Institution/ University Lands ”; and
WHEREAS, said territory is inhabited and all owners of land included in the proposal
consent to this annexation; and
WHEREAS, section 56757 of the California Government Code states that the Local
Agency Formation Commission shall not review an annexation proposal to any City in Santa
Clara County of unincorporated territory which is within the urban service area of the city if
initiated by resolution of the legislative body and therefore the Council of the City of Palo Alto is
now the conducting authority for said annexation; and
WHEREAS, Government Code section 56663 (a) provides that if a petition for
annexation is signed by all owners of land within the affected territory, the City Council may
approve or disapprove the annexation without public hearing; and
WHEREAS, evidence was presented to the City Council.
NOW, THEREFORE, the Council of the City of Palo Alto does hereby resolve as
follows:
SECTION 1. That it is the conducting authority pursuant to Section 56757 of the
Government Code for the annexation of property designated “Major Institution/ University
Lands”, more particularly described in Exhibits “A” and “B”;
SECTION 2. That the following findings are made by the Council of the City of Palo
Alto:
*NOT YET APPROVED*
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a. That said territory is inhabited and comprises approximately .65 acres;
b. That the annexation is consistent with the orderly annexation of territory within the
City’s urban service area and is consistent with the City policy of annexing when
providing City services;
c. On June 6, 2011, the City Council certified the Final Environmental Impact Report
for the Stanford University Medical Center Renewal and Expansion Project pursuant
to the California Environmental Quality Act;
d. The City Council on June 6, 2011, enacted an ordinance pre-zoning the subject
territory with the “Hospital District” zoning designation;
e. That the territory is within the city urban service area as adopted by the Local Agency
Formation Commission of Santa Clara County;
f. The City requests the County Surveyor, if necessary, determine the boundaries of the
proposed annexation to be definite and certain, and in compliance with the
Commission’s road annexation policies. The Applicant shall reimburse the County
for the actual cost incurred by the County Surveyor in making this determination;
g. That the proposed annexation does not create islands or areas in which it would be
difficult to provide municipal services;
h. That the proposed annexation does not split lines of assessment or ownership;
i. That the proposed annexation is consistent with the City’s General Plan;
j. That the territory to be annexed is contiguous to existing City limits; and
k. That the City has complied with all conditions imposed by the Commission for
inclusion of the territory in the City’s urban service area.
SECTION 3. That no subject agency has submitted any written opposition to a waiver of
protest proceedings.
SECTION 4. That all property owners and registered voters have been provided written
notice of this proceeding and no opposition has been received.
SECTION 5. That said annexation is hereby ordered without any further protest
proceedings pursuant to Government Code section 56663 (d).
/ /
/ /
*NOT YET APPROVED*
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BE IT FURTHER RESOLVED that upon completion of these reorganization proceedings
the territory annexed will be detached from the County of Santa Clara.
BE IT FURTHER RESOLVED that upon completion of these reorganization proceedings
the territory reorganized will be taxed.
INTRODUCED and PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
____________________________ ____________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
____________________________ ____________________________
Senior Asst. City Attorney City Manager
____________________________
Director of Planning and Community
Environment
____________________________
Director of Administrative
Services
*NOT YET APPROVED*
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*NOT YET APPROVED*
101018 jb 013714
** Not Yet Approved **
Ordinance No. ______
Ordinance of the Council of the City of Palo Alto Adding
Section 8.10.95 (Tree Removal in HD Zone) to Chapter 8.10
(Tree Preservation and Management Regulations) of Title 8
(Trees and Vegetation) and Amending Section 16.20.160(a)(1)
(Special Purpose Signs) of Chapter 16.20 (Signs) of Title 16
(Building Regulations) and Amending Section 18.08.010
(Designation of General Districts) and Section 18.08.040 to
Chapter 18.08 (Designation and Establishment of Districts) and
Adding Chapter 18.36 (Hospital (HD) District) to Title 18
(Zoning) of the Palo Alto Municipal Code
The Council of the City of Palo Alto does ORDAIN as follows:
SECTION 1. The City Council finds as follows:
(a) Stanford Hospital and Clinics (“SHC”), Lucile Salter Packard Children’s
Hospital at Stanford (“LPCH”) and Stanford University School of Medicine (“SoM”) operate
existing Stanford University Medical Center (“SUMC”) facilities within the City of Palo Alto on
two sites that are collectively approximately 66 acres: the approximately 56-acre Main SUMC
Site and the approximately 9.9-acre Hoover Pavilion Site. The two sites collectively are referred
to in this zoning ordinance as the SUMC Sites. The Main SUMC Site is primarily bounded by
Welch Road, Quarry Road, and Stanford University lands in unincorporated Santa Clara County.
The Hoover Pavilion Site is located south and east of the corner of Quarry Road and Palo Road.
The boundaries of the SUMC Sites are shown on Exhibit A to this zoning ordinance.
(b) SHC, LPCH and SoM have applied for a Zone Change, Comprehensive Plan
Amendment, Environmental Assessment, Architectural Review, Annexation and a Development
Agreement for the Stanford University Medical Center Facilities Renewal and Replacement
Project (“Project” or “SUMC Project”), including the demolition, renovation, and replacement of
on-site structures, thereby adding approximately 1.3 million square feet of net new floor area.
(c) Following staff review and preparation of the Environmental Impact Report
for the SUMC Project, the Planning and Transportation Commission (Commission) reviewed the
Project, including this zoning ordinance, and recommended approval on May 11, 2011. The
Commission’s recommendations are contained in Attachment L.
(d) On June 6, 2011, the City Council certified the Environmental Impact Report
for the SUMC Project, adopted the findings required by the California Environmental Quality
Act (CEQA) and adopted a Statement of Overriding Considerations.
(e) Section 8.80.010 of Chapter 8.80 of Title 18 of the Palo Alto Municipal Code
allows the City to amend Title 18 by changing the boundaries of districts, or by changing the
regulations applicable within one or more districts, or by changing any other provision of Title
18, whenever the public interest or general welfare may so require. The amendments to Title 18
specified in this ordinance are necessary to carry out the SUMC Project, which will benefit the
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** Not Yet Approved **
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public interest and general welfare. The Stanford University Medical Center is recognized as a
global leader in medical care and research, having pioneered advancements in transplantation
medicine, cancer care, prenatal diagnosis and treatment, and diabetes and cholesterol treatments.
In 2009, the SHC and LPCH served 64 percent of Palo Alto residents who required
hospitalization. The Project will enable the SHC, LPCH and SoM to continue this important
work, and the addition of more beds for adults and children will alleviate overcrowding and
allow the hospitals to serve patients who currently must be turned away. The hospitals also
provide the only Level 1 Trauma Center between San Francisco and San Jose. The Trauma
Center and the Emergency Department ensure critical community emergency preparedness and
response resources for the community in the event of an earthquake, pandemic, or other major
disaster.
SECTION 2. Section 8.10.95 of Chapter 8.10 of Title 8 of the Palo Alto
Municipal Code is hereby added to read as follows:
“8.10.95 Tree Removal in HD Zone
Tree removal and relocation in the HD shall be subject to the provisions in Section
18.36.070. To the extent Section 18.36.070 is inconsistent with this Chapter, Section 18.36.070
shall control.”
SECTION 3. The following amendments are made to Chapter 16.20 of Title 16
of the Palo Alto Municipal Code in order to address maximum sign size and location in the HD.
a. Section 16.20.120(a) (Freestanding signs) is hereby amended to read as follows:
“(a) Freestanding Signs Over Five Feet. Freestanding signs over five feet in height
shall be permitted only on nonresidential properties in the Hospital Zone, GM zones and on El
Camino Real in the CN and CS zones and for service stations, restaurants and shopping centers
elsewhere.”
b. Section 16.20.160(a)(1) is hereby amended to read as follows:
“(1) Directory Signs. In all districts where group occupancies in office buildings are
permitted, directory signs may be erected displaying the names of the occupants of a building
who are engaged in a particular profession, business or the like. Such signs shall be situated at
least two feet inside the property line and shall not exceed eight feet in height. Such signs may
have an area of four square feet, plus one and one-half square feet per name, in no event to
exceed seventy-five square feet. In the HD district, Directory and Directional signs may be up to
12 feet in height, thirty square feet in area, and located no less than two feet from the nearest
public right-of-way unless an alternative location is approved by the Planning Director.”
c. Section 16.20.270, Table 1, first note, is hereby amended to read as follows:
“This Table is to be used in all Zoning Districts except for the GM zones, the
Hospital District, and for El Camino frontages of CN and CS zoned properties.”
d. Section 16.20.270, Table 2, first note, is hereby amended to add the following:
“For requirements in the HD district, see Section 16.20.160(a)(1).”
** Not Yet Approved **
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SECTION 4. Section 18.08.010 (Designation of General Districts) of Chapter
18.08 (Designation and Establishment of Districts) of Title 18 (Zoning) is amended to read as
follows:
Map Designation Zoning District Name Chapter Number
R-E Residential estate district 18.10
R-2 Two-family residence district 18.10
RMD Two unit multiple-family residence district 18.10
R-1 Single-family residence district 18.12
RM-15 Low density multiple-family residence district 18.13
RM-30 Medium density multiple-family residence district 18.13
RM-40 High density multiple-family residence district 18.13
CN Neighborhood commercial district 18.16
CC Community commercial district 18.16
CS Service commercial district 18.16
CD Downtown commercial district 18.18
MOR Medical office and medical research district 18.20
ROLM Research, office and limited manufacturing district 18.20
RP Research park district 18.20
GM General manufacturing district 18.20
PF Public facilities district 18.28
OS Open space district 18.28
AC Agricultural conservation district 18.28
PC Planned community district 18.38
HD Hospital district 18.36
SECTION 5. Section 18.08.040 (Zoning Map and District Boundaries) of
Chapter 18.08 (Designation and Establishment of Districts) of Title 18 (Zoning) is amended to
include the HD district on the Zoning Map.
SECTION 6. The following amendments are made to Chapter 18.28 of Title 18
of the Palo Alto Municipal Code in order to remove references to the Stanford Hoover Pavilion
Site from the provisions governing the Public Facilities (PF) District:
a. Section 18.28.02(h) (defining the Stanford Hoover Pavilion site) is hereby
deleted.
b. Section 18.28.050 (Site Development Standards), Table 2, footnote 3 is hereby
amended to read: “(3) Provided that, for parking facilities, the maximum floor area ratio and site
coverage shall be equal to the floor area ratio and site coverage established by the most
restrictive adjacent district, and provided, further, that the maximum floor area ratio for the
Stanford Hoover Pavilion Site shall be .25:1.”
** Not Yet Approved **
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SECTION 7. Chapter 18.36 of Title 18 of the Palo Alto Municipal Code is
hereby added to read as follows:
“Chapter 18.36
HOSPITAL (HD) DISTRICT
Sections:
18.36.010 Purposes
18.36.020 Applicable Regulations
18.36.030 Definitions
18.36.040 Land Uses
18.36.050 Development Standards
18.36.060 Parking and Loading
18.36.070 Tree Preservation
18.36.080 Signs
18.36.090 Historical Review
18.36.100 Architectural Review
18.36.110 Grandfathered Uses
18.36.120 Consistency with Development Agreement
18.36.010 Purposes
The Hospital (HD) district is designed to accommodate medical and educational uses including
the Stanford Hospital and Clinics (SHC), Lucile Packard Children’s Hospital (LPCH), medical,
office, research, clinic and administrative facilities at the Stanford Hoover Pavilion Site, and
School of Medicine (SoM) buildings in a manner that balances the needs of hospital, clinic,
medical office and research uses with the need to minimize impacts to surrounding areas and
neighborhoods.
18.36.020 Applicable Regulations
The specific regulations of this chapter and the additional regulations and procedures established
by this title shall apply to all Hospital Districts.
18.36.030 Definitions
For the purposes of this section, the following terms are defined:
(a) The “Main SUMC” site is defined as all properties zoned HD bounded by Welch Road,
Pasteur Drive and Quarry Road and is comprised of Assessor’s Parcel Numbers 142-23-
003, 142-23-004, 142-08-005, 142-23-006, 142-23-007, 142-23-010, 142-23-012, 142-23-
016, 142-23-017, 142-23-018, 142-23-019, 142-23-024, 142-23-025.
(b) The “Stanford Hoover Pavilion” site is defined as all properties zoned HD bounded by
Quarry Road and Palo Road and is comprised of Assessor's Parcel numbers, 142-04-011
and 142-04-019.
** Not Yet Approved **
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18.36.040 Land Uses
The uses of land allowed by this chapter in the HD district are identified in the following table.
Land uses that are not listed on the table are not allowed, except where otherwise noted.
Permitted and conditionally permitted land uses for the HD district are shown in Table 1:
Table 1: HD Permitted and Conditional Uses
LAND USE HD Subject to
Regulations in:
ACCESSORY AND SUPPORT USES
Accessory facilities and activities customarily associated with or
essential to permitted uses, and operated incidental to the principal use P
Eating and drinking services in conjunction with a permitted use P
Retail services in conjunction with a permitted use P
Ch. 18.40,18.42
EDUCATIONAL, RELIGIOUS, AND ASSEMBLY USES
Churches and religious institutions P
Public or private colleges and universities and facilities appurtenant
thereto CUP
HEALTH CARE SERVICES
Ambulance services CUP
Convalescent Facilities CUP
Hospitals CUP
Medical Office CUP
Medical Research CUP
Medical Support Retail P
Medical Support Services P
OTHER USES
Other uses which, in the opinion of the director, are similar to those
listed as permitted or conditionally permitted uses P, CUP
PUBLIC/QUASI-PUBLIC FACILITY USES
All facilities owned or leased, and operated or used, by the City of
Palo Alto, the County of Santa Clara, the State of California, the
government of the United States, the Palo Alto Unified School District,
or any other governmental agency
P
Community Centers CUP
Utility Facilities essential to provision of utility services but excluding
construction/storage yards, maintenance facilities, or corporation
yards.
CUP
SERVICE USES
Day Care Centers CUP
Hotels providing not more than 10% of rooms with kitchens CUP
TRANSPORTATION USES
Helipads and Helicopter uses CUP
Transit stops and shelters P
** Not Yet Approved **
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LAND USE HD Subject to
Regulations in:
Parking Facilities CUP
TEMPORARY USES
Farmers markets P
Temporary parking facilities, provided such facilities shall remain no
more than five years P
18.36.050 Development Standards
(a) Development Standards
Table 2 specifies the development standards for structures in the HD district.
Table 2: Development Standards
HD
Subject to
regulations in
Section (7):
Minimum Site Area No standards
Minimum Site Width No standards
Minimum Site Depth No standards
Minimum Street Setbacks 10 ft (1)
Maximum Site Coverage 40% (2)(4) 18.04.030(a)(86)
Maximum Height (ft) 130 ft (5) 18.04.030(a)(67);
18.40.090
Maximum Floor Area Ratio (FAR) 1.5 to 1 (3)(6) 18.04.030(a)(57)
(1) Measured from the right-of-way line of any public street to the base of the buildings and not including any
awnings or other projections. This setback requirement does not apply to below-grade parking facilities or
portions of buildings that bridge a street. This setback requirement also does not apply to any portion of a lot or
site that does not abut a public street.
(2) Site coverage is calculated based upon the total contiguous area within this zone (Main SUMC site or the
Stanford Hoover Pavilion site), rather than on a parcel-by-parcel basis.
(3) FAR is calculated based up on the total contiguous area within this zone (Main SUMC site or the Stanford
Hoover Pavilion site), rather than on a parcel-by-parcel basis.
(4) The maximum site coverage for the Stanford Hoover Pavilion site shall be 30 percent.
(5) The maximum height for new construction at the Stanford Hoover Pavilion site shall be 60 ft.
(6) The maximum floor area ratio for the Stanford Hoover Pavilion site shall be 0.5 to 1.
(7) The regulations referenced in this table apply except as revised in this chapter.
(b) Floor Area Ratio
Except as provided in this section, floor area ratio shall be defined in accord with Chapter 18.04
of the Zoning Ordinance. All areas used to enclose service and mechanical equipment, whether
on rooftops, basements, interstitial space, or other interior areas, shall be excluded from floor
area calculations. All parking facilities also shall be excluded from floor area calculations.
** Not Yet Approved **
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(c) Lot Coverage
Except as provided in this section, lot coverage shall be defined in accord with Chapter 18.04 of
the Zoning Ordinance. Parking facilities shall be excluded from lot coverage.
(d) Height and Grade
(1) Except as provided in this section, building height shall be defined in accord with
Chapters 18.04 and 18.40.090 of the Zoning Ordinance. Helicopter pads on top of
the buildings, rooftop mechanical equipment and associated screens, cryogen
vents, grease hoods, wind or solar energy equipment, and elevator shafts/
overruns shall be excluded from building height calculations, but shall be subject
to architectural review as required in Chapters 18.76 and 18.77 of the Zoning
Ordinance.
(2) Grade shall be measured in accord with Chapter 18.04 of the Zoning Ordinance.
(e) Street Setbacks
Except as provided in this section, setbacks shall be defined in accord with Chapter 18.04 of the
Zoning Ordinance. In the HD district, setbacks from public streets shall be defined as the area
between the right of way line of any public street to the base of the building, and not including
any awnings or other projections. Setback requirements do not apply to any below grade parking
facilities or portions of buildings that bridge a street. Setback requirements also do not apply to
any portion of a lot or site that does not abut a public street. No setback requirements other than
street setback requirements apply in the HD district.
(f) Recycling Storage
All new development, including approved modifications that add thirty percent or more floor
area to existing uses, shall provide adequate and accessible interior areas or exterior enclosures
for the storage of recyclable materials in appropriate containers. The design, construction and
accessibility of exterior recycling areas and exterior enclosures shall be subject to
recommendation by the architectural review board, and approval by the director of planning and
community environment, in accordance with Section 18.76.020 of the Zoning Ordinance.
(g) Employee Shower Facilities
Employee shower facilities shall be provided for any new building constructed or for any
addition to or enlargement of any existing building as specified in Table 3.
Table 3: Employee Showers Required
Uses Gross Floor Area of New
Construction (ft2) Showers Required
0 - 9,999 No requirement
10,000 – 19,999 1
20,000 – 49,999 2
All government or special district
facilities designed for employee
occupancy, colleges and
universities, private educational
facilities, business and trade
schools and similar uses 50,000 and up 4
** Not Yet Approved **
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18.36.060 Parking and Loading
(a) Except as provided in this section, off-street parking and loading facilities shall be required
for all permitted and conditional uses in accord with Chapter 18.52 and 18.54 of the
Zoning Ordinance. Except as provided in this section, all parking and loading facilities on
any site, whether required as minimums or optionally provided in addition to minimum
requirements, shall comply with regulations and the design standards established by
Chapters 18.52 and 18.54 of the Zoning Ordinance.
(b) Parking requirements in the HD district will be performance-based, as established by the
applicable conditional use permit. Parking shall be provided to meet projected needs, with
consideration given to the potential for reduced parking demand due to the proximity of
the Palo Alto Intermodal Transit Station (PAITS) and demonstrated effective
transportation demand management (TDM) programs.
(c) The following parking improvements shall be exempt from the parking landscape
requirements of Section 18.54.040:
(1) All structured parking facilities;
(2) Restriping of existing surface parking facilities and other improvements to surface
parking facilities that do not materially alter the existing conditions; and
(3) Parking or loading areas identified for use in the event of emergency or mass
population events such as earthquakes, pandemics, or human-made
biological/chemical exposure.
(d) Valet parking facilities shall be exempt from the requirements of Sections 18.54.030 and
18.54.040(c).
(e) For the purposes of calculating shading percentage pursuant to Section 18.54.040(d):
(1) Shade structures may be utilized in lieu of trees;
(2) The canopies of Protected Trees (as defined by Section 8.10.020(j)) transplanted
on the Site will count as double the actual tree canopy; and
(3) Valet parking facilities may be designed to achieve 25 percent shading (rather
than 50 percent shading).
18.36.070 Tree Preservation
(a) Applicability
(1) Except as provided in this section, development in the HD district shall comply
with Palo Alto Municipal Code Chapter 8.10 (Tree Preservation and Management
Regulations), and the City Tree Technical Manual.
(2) No Protected tree (as defined by Section 8.10.020 (j)), shall be removed or
relocated until the Director of Planning and Community Environment
(“Director”), in consultation with the City Arborist, has determined whether the
** Not Yet Approved **
110503 jb 0130755 9
Protected tree meets the standards of Group 1 or Group 2 Trees, as defined below,
and the applicable Protected Tree Removal Permit or Protected Tree Relocation
Permit has been obtained. The City’s determination whether a Protected Tree
meets the standards of Group 1 or Group 2 Trees shall be valid for a period of ten
years following the date of such determination.
(3) For the purposes of this Chapter, “Biological tree resources” shall have the same
meaning as “Protected trees” as defined in Section 8.10.020 (j).
(4) For the purposes of this Chapter, “Biological and Aesthetic tree resources” shall
consist of those trees that are both Biological tree resources and that have been
designated as Group 1 Trees by the Director in consultation with the City Arborist
based on a finding that the tree possesses at least one of the following
characteristics:
(i) Functions as an important or prominent visual feature relating to
the existing area, proposed conditions, pedestrian or vehicular
thoroughfares;
(ii) Contributes to a larger grove or shared canopy, landscape theme or
otherwise provides important visual balance to existing buildings,
trees or streetscape; or
(iii) Possesses unique character as defined in the designation of
Heritage Trees, (Section 8.10.090) such as, an outstanding
specimen of a desirable species, distinctive in form, size, age,
location or historical significance.
(5) Within the HD district, Protected trees fall into one of the following categories:
(i) Group 1 Trees: Biological and Aesthetic tree resources which are
identified in Table 4. If a Protected tree is not listed in Table 4, or
if more than ten years have elapsed since the City’s determination
whether the tree is a Group 1 Tree, the Director shall determine
whether the tree meets the definition of Section 18.36.070(a)(4),
above prior to issuance of any permit to remove or relocate the
tree;
(ii) Group 2 Trees: Biological tree resources that are identified in
Table 4. If a Protected tree is not listed in Table 4, or if more than
ten years have elapsed since the City’s determination whether the
tree is a Group 2 Tree, the Director shall determine whether the
tree meets the definition of Section 18.36.070(a)(3), above prior to
issuance of any permit to remove or relocate the tree.
** Not Yet Approved **
110503 jb 0130755 10
Table 4: Protected Tree Groups
Tree Group Tree Tag Number (from SUMC FEIR) Tree Location
33, 34, 35, 36, 37, 38, 39, 40, 41 Kaplan Lawn
317, 318, 319, 320, 322, 323*, 324* FIM 1
1
608, 996* Welch Road
325, 326, 327, 328 FIM 1
333, 373, 374, 375, 383, 387, 388, 410, 425, 428,
433, 436, 438, 439, 440, 441, 448, 450, 478, 479,
538, 544
SHC
887, 960, 961, 966, 967, 968, 969, 970, 1010, 1011,
1016, 1017, 1092, 1096, 1097, 1098, 1102, 1103,
1104, 1107, 1108, 1109, 1111, 1119, 1170, 1172,
1174, 1175, 1176, 1177
LPCH
2
1349, 1350, 1351, 1352, 1365,1366, 1388, 1389,
1390, 1391, 1393, 1399, 1400, 1420, 1435, 1438,
1439, 1442, 1469, 1481, 1483, 1485, 1500, 1503,
1506
Hoover
*Trees to be relocated.
(b) Preservation. Notwithstanding Chapter 8.10, Group 1 Trees shall not be removed unless
they meet the standard in Section 8.10.050(a). Authorized relocation of Group 1 Trees
shall not constitute removal.
(c) Relocation. Notwithstanding Chapter 8.10, Group 1 and Group 2 Trees may be relocated
upon issuance of a Protected Tree Relocation Permit from the Director in consultation with
the City Arborist. For purposes of this section, authorized relocation of Group 1 and 2
Trees shall not constitute removal. The requirements for a Protected Tree Relocation
Permit shall be as follow:
(1) The applicant shall submit a proposed Tree Relocation and Maintenance Plan
(TRMP) that (i) evaluates the feasibility of moving the tree to another location on
or near the development site; and (ii) identifies the actions to be taken to increase
the likelihood that relocation is successful including the following information:
pre-relocation irrigation, relocation procedures, monitoring inspections, and post-
relocation tree irrigation and maintenance.
(2) If the Director determines the proposed relocation is feasible, the Director shall
issue a Protected Tree Relocation Permit requiring the following:
(i) The Protected Tree Relocation Permit shall specify the actions
required to increase the likelihood that relocation is successful.
(ii) Location of relocated trees is subject to review and approval by the
Director in consultation with the City Arborist.
(iii) If the relocated tree does not survive after a period of five years,
the relocated tree shall be replaced with a tree or a combination of
trees and Tree Value Standards consistent with Section 3.20,
** Not Yet Approved **
110503 jb 0130755 11
Table 3-1 Tree Canopy Replacement, of the Tree Technical
Manual. If, after relocation, a relocated tree is disfigured, leaning
with supports needed, or in decline with a dead top or dieback of
more then 25 percent, the tree shall be considered a total loss and
replaced as described in this subsection.
(iv) The applicant shall provide a security guarantee for relocated trees,
as determined by the Director of Planning and Community
Environment, in consultation with the City Arborist, in an amount
consistent with the Tree Technical Manual.
(d) Removal of Group 2 Trees. Notwithstanding Chapter 8.10, removal of Group 2 Trees
shall be allowed in the HD district, upon issuance of a Protected Tree Removal Permit from
the Director in consultation with the City Arborist. The requirements for a Protected Tree
Removal Permit shall be as follows:
(1) Group 2 Trees that are removed without being relocated shall be replaced in
accordance with the ratios set forth in Table 3-1 of the City of Palo Alto Tree
Technical Manual in the following way:
(i) The Protected Tree Removal Permit issued shall stipulate the tree
replacement requirements for the removed tree, including number
of trees, size, location, and irrigation. The number and size of trees
required for replacement shall be calculated in accordance with
Table 3-1 of the Tree Technical Manual.
(ii) The difference between the required tree replacement and the
number of trees that cannot be feasibly planted on site shall be
mitigated through contribution to the City of Palo Alto Forestry
Fund as provided in Section 3.15 of the Tree Technical Manual.
Payment to the Forestry Fund would be in the amount representing
the fair market value, as described in Section 3.25 of the Tree
Technical Manual, of the replacement trees that cannot be feasibly
planted on site.
(2) Location of replacement trees is subject to review and approval by the Director in
consultation with the City Arborist.
(e) Appeal. Any person seeking the Director's classification of Group 1 or 2 Trees, or seeking
the approval to remove or relocate a Protected tree pursuant to this Chapter who is
aggrieved by a decision of the Director may appeal such decision in accordance with the
procedures set forth in Chapter 18.78 (Appeals).
18.36.080 Signs
Signs within the HD district shall comply with Chapter 16.20, except as follows: The
requirements for Directory Signs and Directional Signs set forth in Section 16.20.160 are
modified to allow such Directory and Directional signs to be up to 12 feet in height, thirty square
feet in area, and located no less than two feet from the nearest public right-of-way unless an
alternative location is approved by the Planning Director.
** Not Yet Approved **
110503 jb 0130755 12
18.36.090 Historic Review
Any exterior alterations to the Stanford Hoover Pavilion and any new construction on the
Stanford Hoover Pavilion site shall be provided to the Historic Resources Commission for
comment prior to final review by the Architectural Review Board. In reviewing any new
construction on the Stanford Hoover Pavilion site the prime concern of the Historic Review
Board shall be to ensure that the new construction is differentiated from the old and is
compatible with the massing, size, scale, and architectural features to protect the historic
integrity of the Hoover Pavilion building and site.
18.36.100 Architectural Review
Architectural review, as required in Chapters 18.76 and 18.77 of the Zoning Ordinance, is
required prior to the issuance of any building permit in the HD district. Architectural review for
landscape and design features linking building areas within the HD district may be implemented
through approval of Design Guidelines, which may be modified in the same manner as other
architectural review approvals. Directory Signs, Construction Project Signs, and Directional
Signs consistent with the area and location regulations set forth in Section 16.20.160 (as
modified by Section 18.36.080) and temporary, unsecured pedestrian amenities such as café
seating and furniture are exempt from Architectural review.
18.36.110 Grandfathered Uses
(a) Applicability
(1) Except as provided in this section, nonconforming uses and noncomplying
facilities are governed by Chapter 18.70 of the Zoning Ordinance.
(2) Any use allowed as a conditional use but legally existing as a permitted use prior
to the effective date of amendments to the Zoning Ordinance modifying the
allowable uses in the HD district shall be considered a conforming use, except
that a conditional use permit shall be required if the use is expanded as outlined in
Section 18.70.020.
18.36.120 Consistency with Development Agreement
It is the intent of the City Council that the provisions of this Chapter 18.36 be interpreted
consistent with the terms of the Development Agreement between the City of Palo Alto and
Stanford University approved and adopted by Ordinance No. _______.
SECTION 8. The EIR for this project was certified by the City Council on June
6, 2011.
/ /
/ /
/ /
/ /
** Not Yet Approved **
110503 jb 0130755 13
SECTION 9. This ordinance shall be effective on the thirty-first day after the
date of its adoption.
INTRODUCED:
PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
____________________________ ____________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
____________________________ ____________________________
Senior Asst. City Attorney City Manager
____________________________
Director of Administrative
Services
** Not Yet Approved **
110503 jb 0130755 14
EXHIBIT “A”
* NOT YET APPROVED *
110615 jb 0130722
1
Ordinance No. ________
Ordinance of the Council of the City of Palo Alto
Approving a Development Agreement Between the City of
Palo Alto and Stanford Hospital and Clinics; Lucile Salter
Packard Children’s Hospital at Stanford; and the Board of
Trustees of the Leland Stanford Junior University
The Council of the City of Palo Alto does ORDAIN as follows:
SECTION 1. Recitals.
A. Stanford Hospital and Clinics, a California nonprofit public benefit corporation
(“SHC”), Lucile Salter Packard Children’s Hospital at Stanford, a California nonprofit public
benefit corporation (“LPCH”), and the Board of Trustees of the Leland Stanford Junior
University, a body having corporate powers under the laws of the State of California
(“University,” and together with SHC and LPCH, collectively, the “SUMC Parties”) intend to
replace, retrofit and enhance their facilities in the City of Palo Alto. In conjunction with certain
state-mandated retrofit and replacement work, the SUMC Parties also intend to expand their
hospital, clinic and medical office facilities to meet patient demand. To facilitate this, the SUMC
Parties have applied to the City of Palo Alto (“City”) for a development agreement pursuant to
Sections 65864-65869.5 of the California Government Code and the City’s Resolution No. 6597
(“Agreement”). Pursuant to this Agreement, the SUMC Parties would provide certain
community benefits and voluntary mitigation measures.
B. In exchange for these community benefits and voluntary mitigation measures,
and in recognition of the substantial public benefits provided by the SUMC Parties’ facilities and
operations, the City would vest for a period of thirty (30) years the SUMC Parties’ rights to
develop and use their facilities in Palo Alto in accordance with the Project Approvals, and would
streamline the process for obtaining Subsequent Approvals, as described in the Agreement.
C. Under the terms of the Agreement, the parties have the right to unilaterally
terminate this Agreement, if this ordinance is subject to a referendum or if litigation is
commenced seeking to rescind the Project Approvals or the City’s decision to enter into this
Agreement within one year from the date of the filing of the Notice of Determination.
SECTION 2. Findings.
The City Council finds and determines that:
A. Notice of intention to consider the development agreement has been given
pursuant to Government Code section 65867.
B. The City’s Planning and Transportation Commission and City Council have
given notice of intention to consider this Agreement, have conducted public hearings thereon
* NOT YET APPROVED *
110615 jb 0130722
2
pursuant to Government Code section 65867 and City’s Resolution No. 6597, and the City
Council has found that the provisions of this Agreement are consistent with City’s
Comprehensive Plan, as amended.
C. The City has prepared and certified an EIR and has imposed mitigation measures
as Conditions of Approval prior to the execution of this Agreement.
SECTION 3. The City Council hereby approves the Development Agreement
between the City of Palo Alto and Stanford Hospital and Clinics, a California nonprofit public
benefit corporation (“SHC”), Lucile Salter Packard Children’s Hospital at Stanford, a California
nonprofit public benefit corporation (“LPCH”), and the Board of Trustees of the Leland Stanford
Junior University, a copy of which is attached hereto as Exhibit "A", and authorizes the Mayor to
execute the Agreement on behalf of the City.
SECTION 4. The City Clerk is directed to cause a copy of the development
agreement to be recorded with the County Recorder not later than ten (10) days after it becomes
effective.
SECTION 5. The City Council adopts this ordinance in accordance with the
California Environmental Quality Act (“CEQA”) findings adopted by Resolution No. 9168.
/ /
/ /
/ /
/ /
/ /
/ /
/ /
/ /
/ /
/ /
/ /
/ /
//
* NOT YET APPROVED *
110615 jb 0130722
3
SECTION 6. This ordinance shall be effective upon the thirty-first (31st) day
after its adoption.
INTRODUCED:
PASSED:
AYES:
NOES:
ABSTENTIONS:
NOT PARTICIPATING:
ABSENT:
ATTEST: APPROVED:
__________________________ __________________________
City Clerk Mayor
__________________________
APPROVED AS TO FORM: City Manager
__________________________ __________________________
Senior Asst. City Attorney Director of Planning and Community
Environment
This document is recorded
for the benefit of the City
of Palo Alto and is entitled
to be recorded free of charge
in accordance with Section 6103
of the Government Code.
After Recordation, mail to:
City Clerk
City of Palo Alto
250 Hamilton Avenue
P.O. Box 10250
Palo Alto, CA 94303
DEVELOPMENT AGREEMENT
Between
CITY OF PALO ALTO, a chartered city
and
STANFORD HOSPITAL AND CLINICS,
a California nonprofit public benefit corporation,
LUCILE SALTER PACKARD CHILDREN’S HOSPITAL AT STANFORD,
a California nonprofit public benefit corporation,
and
BOARD OF TRUSTEES OF THE LELAND STANFORD JUNIOR
UNIVERSITY, a body having corporate powers under the laws of the State of
California
110614 sh 0130788
TABLE OF CONTENTS
R E C I T A L S ...................................................................................................... 1
A. Definitions................................................................................................... 1
B. Outline of Terms......................................................................................... 1
C. Nature and Purpose of Development Agreements...................................... 2
D. Authority for City Development Agreements............................................. 2
E. Comprehensive Plan................................................................................... 2
F. Property Interests........................................................................................ 2
G. Seismic Safety Requirements ..................................................................... 2
H. Seismic Safety Project Components........................................................... 3
I. Project Purposes.......................................................................................... 3
J. Project Approvals........................................................................................ 3
K. Compliance with City Requirements.......................................................... 3
L. Binding Future Actions............................................................................... 4
M. Elimination of Uncertainty ......................................................................... 4
N. Orderly Development.................................................................................. 4
O. Nature of Recitals ....................................................................................... 5
A G R E E M E N T
1. Definitions................................................................................................... 5
(a) Annual Payment.............................................................................. 5
(b) Applicable Rules............................................................................. 5
(c) Architectural Review Approval...................................................... 5
(d) City.................................................................................................. 5
(e) Comprehensive Plan....................................................................... 5
(f) Conditions of Approval................................................................... 5
(g) Construction Period. ....................................................................... 6
(h) County Property.............................................................................. 6
(i) Days................................................................................................ 6
(j) Design Guidelines........................................................................... 6
(k) Development Agreement Act. ........................................................ 6
(l) Development Impact Fees............................................................... 6
(m) Discretionary Action and Discretionary Approval......................... 6
(n) Effective Date................................................................................. 7
(o) Hospital Foundation Permit............................................................ 7
(p) Hospital Occupancy Permit............................................................ 7
(q) Hospitals. ........................................................................................ 7
(r) Hospital Zoning Ordinance............................................................. 7
(s) HSSA.............................................................................................. 7
(t) Initial Payment Date. ...................................................................... 8
(u) Initial Project Approvals................................................................. 8
(v) Life Of The Project......................................................................... 8
(w) LPCH.............................................................................................. 8
(x) Mortgage......................................................................................... 8
i of v
110614 sh 0130788
(y) Mortgagee....................................................................................... 8
(z) Net New Square Footage................................................................ 8
(aa) Occupancy Permit........................................................................... 9
(bb) OSHPD. .......................................................................................... 9
(cc) Party................................................................................................ 9
(dd) Project............................................................................................. 9
(ee) Project Approvals.......................................................................... 10
(ff) Property......................................................................................... 10
(gg) SB 1953......................................................................................... 10
(hh) SHC............................................................................................... 10
(ii) School of Medicine....................................................................... 10
(jj) Subsequent Applicable Rules. ...................................................... 10
(kk) Subsequent Approvals. ................................................................. 11
(ll) Subsequent Rules.......................................................................... 11
(mm) SUMC........................................................................................... 11
(nn) SUMC Parties............................................................................... 11
(oo) Term.............................................................................................. 11
(pp) University...................................................................................... 11
(qq) Vested Right.................................................................................. 11
(rr) Zoning Ordinance......................................................................... 11
2. Interest of the SUMC Parties.................................................................... 11
3. Binding Effect........................................................................................... 12
4. Negation of Agency.................................................................................. 12
5. SUMC Parties’ Promises.......................................................................... 12
(a) Health Care Benefits..................................................................... 12
(i) Summary of Intrinsic Benefits.......................................... 12
(ii) Fund for Healthcare Services............................................ 13
(iii) Fund for Community Health and Safety Programs........... 13
(b) Palo Alto Fiscal Benefits. ............................................................. 14
(i) Payment of Sales and Use Taxes...................................... 14
(A) Designation of Project Site for Construction Period
Sales and Use Tax Purposes. ............................................ 14
(B) Direct Pay Permit for Sales and Use Taxes from
Existing Facilities.............................................................. 15
(C) Establishment of Retail Sales and Use Tax
Reporting District.............................................................. 15
(ii) Assurance of Construction Use Tax Revenue. ................. 15
(A) Funds To Be Used In The Event Of A Shortfall... 15
(B) Monitoring Construction Use Tax Revenue......... 15
(C) Reconciliation and Payment of Shortage or
Surplus.................................................................. 16
(D) Costs of Monitoring and Compliance................... 17
(iii) Funding of Operating Deficit............................................ 17
(iv) Payment of Utility User Tax............................................. 17
(v) School Fees....................................................................... 18
110614 sh 0130788 ii of v
(c) Traffic Mitigation and Reduced Vehicle Trips............................. 18
(i) Summary of Existing Programs........................................ 18
(ii) Menlo Park Traffic Mitigation.......................................... 19
(A) Payment...................................................................... 19
(B) Use of Funds............................................................... 19
(iii) East Palo Alto Voluntary Mitigation 20
(iv) Contributions to AC Transit.............................................. 20
(v) Opticom Payments............................................................ 20
(A) Opticom Systems.................................................. 21
(vi) Caltrain Go Passes............................................................ 21
(vii) Marguerite Shuttle Service. .............................................. 21
(viii) Transportation Demand Management Coordinator.......... 22
(ix) Monitoring of TDM programs.......................................... 22
(A) Submission of Reports.......................................... 23
(B) 2025 Mode Split Penalty....................................... 23
(d) Linkages........................................................................................ 24
(i) Improvements to Enhance Pedestrian and Bicycle
Connection from Intermodal Transit Center to El Camino
Real/Quarry Road Intersection. .................................................... 24
(ii) Public Right-of-Way Improvements to Enhance Pedestrian
and Bicycle Connection on Quarry Road..................................... 24
(iii) Stanford Barn Connection................................................. 25
(e) Infrastructure, Sustainable Neighborhoods and Communities, and
Affordable Housing. ..................................................................... 25
(i) Payment............................................................................. 25
(ii) Use of Funds..................................................................... 25
(iii) Use of Housing Credit. ..................................................... 25
(f) Climate Change............................................................................. 26
(i) Sustainability Programs Benefit. ...................................... 26
(g) Administrative Costs..................................................................... 26
(h) Satisfaction of All Conditions of Approval.................................. 26
6. City’s Promises......................................................................................... 27
(a) Vested Rights to Develop and Use the Property........................... 27
(b) Permitted and Conditionally Permitted Uses................................ 27
(c) Maximum Density and Intensity of Uses...................................... 27
(d) Other Development Standards...................................................... 27
(e) Subsequent Rules.......................................................................... 27
(f) Subsequent Approvals. ................................................................. 28
(g) Limitation on Architectural Review Approvals............................ 28
(h) Annexation of County Property.................................................... 28
(i) Utility and Storm Drain Connections. .......................................... 28
(j) Waste Treatment Capacity............................................................ 29
(k) Storm Drain Capacity. .................................................................. 29
(l) OSHPD. ........................................................................................ 29
(m) No Other Dedications. .................................................................. 30
110614 sh 0130788 iii of v
(n) No Other Public Improvements or Financial Contributions......... 30
(o) No Obligation to Develop............................................................. 30
(p) Timing for Performance of Conditions of Approval.................... 30
7. Exceptions................................................................................................. 31
8. Exclusions................................................................................................. 31
(a) Sewer Facilities, Storm Drains and Runoff.................................. 31
(b) Limited Effect on Right to Tax, Assess, or Levy Fees or Charges31
(c) No Limit on Right of City to Adopt and Modify Uniform Codes.33
(d) No Limit on Power of City to Adopt and Apply Rules Governing
Provision and Use of Utility Services........................................... 33
(e) California Environmental Quality Act Compliance (CEQA)....... 33
(f) No General Limitation on Future Exercise of Police Power........ 33
9. Indemnity.................................................................................................. 33
10. Cooperation and Implementation.............................................................. 34
11. Identification of Applicable Rules............................................................ 34
12. Periodic Review of Compliance............................................................... 35
(a) Periodic Review............................................................................ 35
(b) Special Review.............................................................................. 35
(c) Annual Report............................................................................... 35
(d) Supplement to the Annual Report................................................. 35
(e) Procedure...................................................................................... 36
(f) Default by SUMC Parties............................................................. 36
(g) Proceedings Upon Modification or Termination.......................... 37
(h) Hearings on Modification or Termination.................................... 37
(i) Certificate of Compliance............................................................. 37
13. Default by City.......................................................................................... 38
14. Remedies for Default................................................................................ 38
15. Modification, Amendment or Cancellation by Mutual Agreement.......... 39
16. Superseding State or Federal Law............................................................ 40
17. Notices...................................................................................................... 40
18. Term of Agreement; Force Majeure......................................................... 41
(a) Basic Term.................................................................................... 41
(b) Extension for Referendum, Litigation, Default or Moratorium.... 41
(c) Force Majeure............................................................................... 41
19. Assignment; Right to Assign.................................................................... 42
(a) Assignment. .................................................................................. 42
(i) Right to Assign. ................................................................ 42
(ii) Release of Transferor........................................................ 42
20. Mortgagee Protection................................................................................ 43
(a) No Impairment.............................................................................. 43
(b) Notice of Default by the SUMC Parties. ...................................... 43
(c) Notice............................................................................................ 44
(d) Transfer of Ownership.................................................................. 44
21. Miscellaneous. .......................................................................................... 44
(a) Effect of Recitals........................................................................... 44
110614 sh 0130788 iv of v
110614 sh 0130788 v of v
(b) Construction.................................................................................. 44
(c) Severability................................................................................... 45
(d) Time.............................................................................................. 45
(e) Waiver........................................................................................... 45
(f) Governing State Law.................................................................... 45
(g) Determination of Compliance....................................................... 45
(h) Entire Agreement.......................................................................... 45
(i) No Third Party Beneficiaries........................................................ 46
(j) Authority to Execute..................................................................... 46
(k) Administrative Appeal.................................................................. 46
(l) Exhibits......................................................................................... 46
(m) Signature Pages............................................................................. 47
(n) Precedence.................................................................................... 47
(o) Recordation................................................................................... 47
(p) Referendum or Challenge............................................................. 47
(i) City’s Reimbursement Obligation.................................... 48
(ii) Effect of Suspension or Termination of Agreement......... 49
(iii) Limit of City’s Reimbursement Obligations..................... 49
DEVELOPMENT AGREEMENT
THIS DEVELOPMENT AGREEMENT (hereinafter “Agreement”) is
entered into as of this ___ day of _______, 2011, by and between the CITY OF
PALO ALTO, a chartered city of the State of California (“City”), STANFORD
HOSPITAL AND CLINICS, a California nonprofit public benefit corporation
(“SHC”), LUCILE SALTER PACKARD CHILDREN’S HOSPITAL AT
STANFORD, a California nonprofit public benefit corporation (“LPCH”), and
THE BOARD OF TRUSTEES OF THE LELAND STANFORD JUNIOR
UNIVERSITY, a body having corporate powers under the laws of the State of
California (“University,” and together with SHC and LPCH, collectively, the
“SUMC Parties”).
R E C I T A L S
THIS AGREEMENT is entered into on the basis of the following facts,
understandings and intentions of the parties:
A. Definitions.
These Recitals use certain terms with initial capital letters that are defined
in Section 1 of this Agreement. City and the SUMC Parties intend to refer to
those definitions when the capitalized terms are used in these Recitals.
B. Outline of Terms.
Stanford Hospital and Clinics and Lucile Salter Packard Children’s
Hospital provide substantial and important public benefits through operation of
world-class health care facilities and provision of a Level 1 trauma center located
in the City of Palo Alto. The Stanford School of Medicine, which is part of
Stanford University, provides substantial and important public benefits through
research that will be translated into life-saving and life-enhancing medical
treatments and procedures. To comply with the requirements of state law and to
provide state-of-the-art medical and research facilities, the SUMC Parties intend
to replace, retrofit and enhance their facilities in the City of Palo Alto. In
conjunction with certain state-mandated retrofit and replacement work, the SUMC
Parties also intend to expand their hospital, clinic and medical office facilities to
meet patient demand. To facilitate this, the SUMC Parties have applied to the
City for a development agreement pursuant to Sections 65864-65869.5 of the
California Government Code and the City’s Resolution No. 6597. Pursuant to
this development agreement, the SUMC Parties would provide certain community
benefits and voluntary mitigations measures. In exchange for these community
benefits and voluntary mitigation measures, and in recognition of the substantial
public benefits provided by the SUMC Parties’ facilities and operations, the City
would vest for a period of thirty (30) years the SUMC Parties’ rights to develop
and use their facilities in Palo Alto in accordance with the Project Approvals, and
would streamline the process for obtaining Subsequent Approvals, as described in
this Agreement.
1
110614 sh 0130788
C. Nature and Purpose of Development Agreements.
Development agreements were authorized by the State of California in
1979, through the adoption of Government Code Sections 65864-65869.5. These
statutes authorize the parties to enter into binding agreements for the development
of real property within the City. Because California has a “late vesting” rule,
landowners usually cannot be certain that they can proceed with a development
project until they have actually obtained a building permit and started building.
This lack of certainty can discourage long range planning and investment and
make it more difficult for cities to provide needed public facilities. A
development agreement, in which a city agrees that, for a certain period of time, it
will not change the rules applicable to a project, and the property owner agrees to
assist with the provision of public facilities or to otherwise provide community
benefits, can benefit all parties.
D. Authority for City Development Agreements.
Pursuant to Government Code Section 65865, the City adopted Resolution
No. 6597 establishing procedures and requirements for consideration of
development agreements in Palo Alto.
E. Comprehensive Plan.
In July of 1998, the City of Palo Alto adopted its current Comprehensive
Plan, a document containing the City’s official policies on land use and
community design, transportation, housing, natural environment, business and
economics, and community services. Its policies apply to both public and private
properties. The Plan is used by the City Council and Planning and Transportation
Commission to evaluate proposed land use changes in the City, including the
adoption of this Agreement. It is intended to guide City land use decisions.
F. Property Interests.
The University is the fee owner of certain Property. SHC leases from the
University certain portions of the Property and operates the Stanford Hospital and
Clinics, as well as medical offices thereon. LPCH leases from the University
certain other portions of the Property, and operates the Lucile Salter Packard
Children’s Hospital thereon. A portion of the Property is occupied by the
University’s School of Medicine. A portion of the Property consisting of
approximately 0.65 acres is in the unincorporated area of Santa Clara County.
The balance of the Property is within the City of Palo Alto.
G. Seismic Safety Requirements.
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SB 1953 requires hospitals to retrofit or replace facilities that do not meet
State-designated safety criteria by January 1, 2013. Further requirements must be
met by 2030. If a hospital does not comply with these mandates, the State may
revoke the hospital’s operating license. On September 30, 2010, Governor
Schwarzenegger signed SB 608, which will provide SHC with the ability to apply
for up to five additional years for extensions to meet seismic requirements. If the
extensions are granted, the legislation sets a new deadline of January 1, 2018.
Effective January 1, 2011, SHC may apply for a three-year extension of the
structural compliance deadline; from January 1, 2013 to January 1, 2016. SHC
may also be eligible for an additional two-year extension of the 2016 deadline,
subject to certain patient safety criteria. The Office of Statewide Health Planning
and Development is responsible for approving plans for construction work
required by SB 1953.
H. Seismic Safety Project Components.
Several buildings on the Property require structural retrofit or replacement
to comply with SB 1953 and other applicable laws. Also, many of the facilities
within the Property require nonstructural renovations or replacement to comply
with SB 1953. Portions of the School of Medicine that currently occupy space in
structures used for hospital purposes must be physically separated from those
structures or replaced in order to comply with SB 1953 requirements. In addition,
new or replacement hospital structures must meet current standards specified by
the California building code for hospitals; compliance with these standards
necessitates increased square footage and height to accommodate current seismic
structural requirements, patient safety requirements, air handling systems and
mechanical duct work.
I. Project Purposes.
The City and the SUMC Parties desire that the Project is designed and
constructed to achieve timely compliance with the requirements of SB 1953 and
other applicable laws, to meet existing and projected future demand for patient
care, to provide modern, state-of-the-art facilities designed to deliver high quality
healthcare services and related teaching and research, and to meet regional needs
for emergency and disaster preparedness.
J. Project Approvals.
The SUMC Parties have applied for, and the City has certified or
approved, as applicable, certain environmental documents and land use approvals
and entitlements relating to the development of the Project. These actions are
identified on Exhibit B.
K. Compliance with City Requirements.
The City’s Planning and Transportation Commission and City Council
have given notice of intention to consider this Agreement, have conducted public
hearings thereon pursuant to Government Code section 65867 and City’s
Resolution No. 6597, and the City Council has found that the provisions of this
Agreement are consistent with City’s Comprehensive Plan, as amended.
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L. Binding Future Actions.
This Agreement will bind future City Councils to the terms and
obligations specified in this Agreement and limit, to the degree specified in this
Agreement and as authorized under state law, the future exercise of City’s ability
to preclude development on the Property.
M. Elimination of Uncertainty.
This Agreement will eliminate uncertainty in planning and provide for the
orderly development of the Property, eliminate uncertainty about the validity of
exactions imposed by City, allow installation of necessary improvements, provide
for public services appropriate to the development of the Project, and generally
serve the public interest, both within the City of Palo Alto and in the surrounding
region.
N. Orderly Development.
Development of the Project in accordance with this Agreement and the
Project Approvals will provide for orderly development consistent with City’s
Comprehensive Plan. The terms and conditions of this Agreement have
undergone extensive review by City staff, its Planning and Transportation
Commission and the City Council, and have been found to be fair, just and
reasonable. Specifically, the City Council has found that:
1. The provisions of this Agreement and its purposes are consistent
with the goals, policies, programs and standards specified in City’s
Comprehensive Plan;
2. This Agreement will help attain important economic, social,
environmental and planning goals of City and enhances and protects the public
health, safety and welfare of the residents of the City of Palo Alto and the
surrounding region.
3. The SUMC Parties will incur substantial costs in providing
community benefits, including voluntary mitigation, in excess of that required to
address the impacts of the Project;
4. This Agreement will mitigate significant environmental impacts;
and
5. This Agreement will otherwise achieve the goals and purposes for
which the Development Agreement Act (California Government Code Sections
65864-65869.5) was enacted.
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O. Nature of Recitals.
These recitals are intended in part to paraphrase and summarize this
Agreement, however, the Agreement is expressed below with particularity and the
Parties intend that their rights and obligations be determined by those provisions
and not by the recitals.
AGREEMENT
NOW, THEREFORE, the parties do hereby agree as follows:
1. Definitions.
In this Agreement, unless the context otherwise requires:
(a) Annual Payment.
“Annual Payment” means each annual payment subsequent to the first
payment and shall be paid no later than August 31 of the year following the year
in which the first payment is made. For example, if the Initial Payment Date is
June, 2011, the next Annual Payment would be due by August 31, 2012.
(b) Applicable Rules.
“Applicable Rules” means the City ordinances, resolutions, rules,
regulations and official policies in effect on the Effective Date, as amended by the
Project Approvals.
(c) Architectural Review Approval.
“Architectural Review Approval” means the approval of an application for
architectural review under the Applicable Rules, including without limitation the
Hospital Zoning Ordinance.
(d) City.
“City” is the City of Palo Alto.
(e) Comprehensive Plan.
“Comprehensive Plan” is the 1998-2010 Palo Alto Comprehensive Plan,
adopted in July 1998 and as amended through the Effective Date.
(f) Conditions of Approval.
“Conditions of Approval” are the conditions to the Project Approvals or
Subsequent Approvals included in or incorporated by reference in an ordinance,
resolution or motion granting a Project Approval or Subsequent Approval, and
including the environmental mitigations adopted by the City Council.
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(g) Construction Period.
For purposes of payment, monitoring and reconciling Construction Use
Tax payments in Section 5(b), “Construction Period” is the time period between
the issuance of the first permit or approval by a public agency with jurisdiction
over the Project, whether it be the City, OHSPD, or any other public agency,
which allows the SUMC Parties to undertake development and construction
activities contemplated by the Project, the issuance of which the Parties currently
estimate to occur in 2011, and December 31, 2025.
(h) County Property.
“County Property” means the portion of the Property in the unincorporated
area of Santa Clara County, consisting of approximately 0.65 acres.
(i) Days.
“Days” shall mean calendar days.
(j) Design Guidelines.
“Design Guidelines” means the Design Guidelines approved as part of the
Project Approvals, as listed on Exhibit B.
(k) Development Agreement Act.
“Development Agreement Act” means Article 2.5 of Chapter 4, of
Division 1 of the California Government Code (Sections 65864 - 65869.5).
(l) Development Impact Fees.
“Development Impact Fees” means all fees now or in the future collected
by the City from applicants for new development (including all forms of
approvals and permits necessary for development) for the funding of public
services, infrastructure, improvements or facilities, but not including taxes or
assessments, or fees for processing applications or permits or for design review.
The fees included in this definition include, but are not limited to those fees set
forth in Chapters 16.45, 16.47 and 16.58 of the Municipal Code, fees for traffic
improvements and mitigation, and fees for other community facilities or related
purposes (but not including any school fees imposed by a school district);
provided nothing herein shall preclude City from collecting fees lawfully imposed
by another entity having jurisdiction which City is required or authorized to
collect pursuant to State law.
(m) Discretionary Action and Discretionary Approval.
“Discretionary Action” includes a “Discretionary Approval” and is an
action or decision which requires the exercise of judgment, deliberation, and
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which contemplates the imposition of revisions or conditions, by City, including
any board, commission or department and any officer or employee thereof, in the
process of approving or disapproving a particular activity, as distinguished from
an activity which merely requires City, including any board, commission or
department and any officer or employee thereof, to determine whether there has
been compliance with applicable statutes, ordinances, regulations, or Conditions
of Approval.
(n) Effective Date.
“Effective Date” means June 6, 2011.
(o) Hospital Foundation Permit.
“Hospital Foundation Permit” means the OSHPD Incremental Project
Permit allowing either Hospital to construct the primary load bearing foundation
for a new or expanded hospital building. The SUMC Parties’ best estimate of the
anticipated date for issuance of the first Hospital Foundation Permit, based on
current information, is by January 1, 2012.
(p) Hospital Occupancy Permit.
“Hospital Occupancy Permit” means issuance of all permits necessary to
allow the first Hospital building to be used by members of the public for
healthcare services. Issuance of a temporary occupancy permit for purposes of
building preparations in advance of opening shall not trigger obligations based
upon issuance of the Hospital Occupancy Permit. However, a temporary or
partial occupancy permit that allows the Hospital building to be used by the
public for healthcare services shall trigger obligations based upon issuance of the
Hospital Occupancy Permit. The SUMC Parties’ best estimate of the anticipated
date for issuance of the first Hospital Occupancy Permit, based on current
information, is by January 1, 2018.
(q) Hospitals.
“Hospitals” means SHC and LPCH.
(r) Hospital Zoning Ordinance.
“Hospital Zoning Ordinance” is the ordinance of City, adopted as part of
the Project Approvals, amending the Zoning Ordinance to revise and establish the
permitted and conditionally permitted uses, intensity, and other standards and
specifications applicable to the Property.
(s) HSSA.
“HSSA” means the Alfred E. Alquist Hospital Facilities Seismic Safety
Act of 1973, as amended by the Alfred E. Alquist Hospital Facilities Seismic
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Safety Act of 1983, and by SB 1953, as it may be further amended from time to
time.
(t) Initial Payment Date.
“Initial Payment Date” means the date that is 45 days from the filing and
posting of the Notice of Determination filed by the City after the second reading
of the ordinance approving the Hospital District zoning and the ordinance
approving this Development Agreement.
(u) Initial Project Approvals.
“Initial Project Approvals” means those entitlements, permits and
approvals listed on Exhibit B.
(v) Life Of The Project.
“Life Of The Project” means fifty one years from the Effective Date.
(w) LPCH.
“LPCH” means Lucile Salter Packard Children’s Hospital at Stanford, a
California nonprofit public benefit corporation.
(x) Mortgage.
“Mortgage” means and refers, singly and collectively, to any mortgages,
deeds of trust, security agreements, assignments and other like security
instruments encumbering all or any portion of the Property or any of the SUMC
Parties’ rights under this Agreement.
(y) Mortgagee.
“Mortgagee” means and refers to the holder of any Mortgage encumbering
all or any portion of the Property or any of the SUMC Parties’ rights under this
Agreement, and any successor, assignee or transferee of any such Mortgage
holder.
(z) Net New Square Footage.
“Net New Square Footage” means the amount of new square footage
constructed pursuant to the Project Approvals, less the total amount of existing
square footage demolished. For purposes of calculating applicable fees, the
demolition of square footage of the structure at 1101 Welch Road, the 1973 Core
Expansion building, and the 77 square foot hospital entry shall be credited against
the fees for the new SHC hospital structure; demolition of the square footage of
the structures at 701 and 703 Welch Road shall be credited against the fees for
expansion of LPCH; demolition of the square footage of the Nurses’ cottage,
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shops and sheds at the Hoover Pavilion Site shall be credited against the fees for
the square footage of the new medical office building at the Hoover Pavilion Site;
demolition of the Stone Building complex (1959 Hospital Buildings, including
East, West, Core, Boswell, Grant, Alway, Lane and Edwards) shall be credited
against the fees for new square footage for the University and SHC in the amount
corresponding to the new square footage constructed by each entity. To the extent
the SUMC Parties construct new buildings to replace the Stone Building complex
and/or 1973 Core Expansion building prior to demolishing or vacating all or part
of those structures, the SUMC Parties may, in their discretion, elect to take credit
for future demolition of the Stone Building complex and/or 1973 Core Expansion
building when calculating payment of fees for the new square footage.
Construction of School of Medicine improvements for the University is not
expected to result in any Net New Square Footage.
(aa) Occupancy Permit.
“Occupancy Permit” means a permit issued by any agency that allows a
new or expanded structure to be used by members of the public for the intended
uses of the facility. Issuance of a temporary occupancy permit for purposes of
building preparations in advance of opening shall not trigger obligations based
upon issuance of the Occupancy Permit. However, a temporary or partial
occupancy permit that allows the building or structure to be used by the public for
any of the intended uses of the facility shall trigger obligations based upon
issuance of the Occupancy Permit.
(bb) OSHPD.
“OSHPD” means the Office of Statewide Health Planning and
Development.
(cc) Party.
“Party” is a signatory to this Agreement, or a successor or assign of a
signatory to this Agreement.
(dd) Project.
“Project” means development of the Property in accordance with the
Applicable Rules, Project Approvals, and this Agreement, which is generally
described as follows: (1) construction of the new SHC Hospital (in multiple
phases), new SHC Clinic/Medical office buildings, new medical office/clinic
building at the Hoover Pavilion site, new LPCH Hospital, new LPCH
clinic/medical office space, new buildings for the School of Medicine, new SHC
parking structure, new LPCH parking structure, new clinics parking structure at
the Main SUMC Site, new parking structure at the Hoover Pavilion Site, Welch
Road widening, Durand Way connector road, new driveways and drop-off areas,
other roadway improvements, new heliport, and miscellaneous accessory
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structures, surface parking, pavement and landscape improvements; (2)
renovation and remodeling of existing hospital, clinic and medical office facilities
including the Hoover Pavilion; and (3) demolition of the 1959 Stone Building
complex (hospital and School of Medicine buildings), 1973 Core Expansion
building, 1101 Welch Road medical offices, hospital entry, nurses’ cottage,
miscellaneous shops and storage buildings at the Hoover Pavilion Site, 701 and
703 Welch Road medical offices, Parking Structure 3, Falk Lot 5, a portion of the
Hoover Pavilion surface parking lot, and other miscellaneous surface parking,
pavement and landscaped areas.
(ee) Project Approvals.
“Project Approvals” means the approvals, certifications or actions listed
on Exhibit B and any Subsequent Approvals, including all Conditions of
Approval.
(ff) Property.
“Property” means the real property more particularly described in Exhibit
A.
(gg) SB 1953.
“SB 1953” means Senate Bill 1953 (Chapter 740, 1994), California Health
and Safety Code Section 130000 – 130070 (amending the Alfred E. Alquist
Hospital Seismic Safety Act of 1983).
(hh) SHC.
“SHC” means Stanford Hospital and Clinics, a California nonprofit public
benefit corporation.
(ii) School of Medicine.
“School of Medicine” means the Stanford University School of Medicine,
which is part of the University.
(jj) Subsequent Applicable Rules.
“Subsequent Applicable Rules” means the ordinances, resolutions, rules,
regulations and official policies of City, as they may be adopted and effective
after the Effective Date that do not conflict with the Applicable Rules, or that are
expressly made applicable to the subject matter of this Agreement by Sections 7
and 8.
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(kk) Subsequent Approvals.
“Subsequent Approvals” means any approval relating to the Project issued
by the City upon request of any SUMC Party after the Effective Date, including
Discretionary Approvals and ministerial approvals.
(ll) Subsequent Rules.
“Subsequent Rules” means all City ordinances, resolutions, rules,
regulations and official policies in effect at the time a City action is to be taken
that would apply to the Project had this Agreement not been adopted.
(mm) SUMC.
“SUMC” means the Stanford University Medical Center.
(nn) SUMC Parties.
“SUMC Parties” means SHC, LPCH, and the University.
(oo) Term.
“Term” means the term of this Agreement as set forth in Section 18.
(pp) University.
“University” means the Board of Trustees of the Leland Stanford Junior
University, a body having corporate powers under the laws of the State of
California.
(qq) Vested Right.
“Vested Right” means a property right conferred by this Agreement that
may not be rescinded, reduced, revoked or abrogated by the City.
(rr) Zoning Ordinance.
“Zoning Ordinance” is the zoning ordinance for the City of Palo Alto
(Title 18 of the Palo Alto Municipal Code).
2. Interest of the SUMC Parties.
Each of the SUMC Parties represent that, as of the Effective Date, it has a
legal or equitable interest in all or a portion of the Property as required by Section
65865 of the California Government Code.
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3. Binding Effect.
Subject to the provisions of Section 19 below, this Agreement, and all of
the terms and conditions hereof, shall run with the land and shall be binding upon
and inure to the benefit of the parties and their respective assigns, heirs or other
successors in interest.
4. Negation of Agency.
The parties acknowledge that, in entering into and performing this
Agreement, the City, on the one hand, and the SUMC Parties, on the other hand,
are each acting as an independent entity and not as an agent of the other in any
respect. Nothing contained herein or in any document executed in connection
herewith shall be construed as making City the joint venturer or partner of any of
the SUMC Parties, or any of the SUMC Parties the joint venturer or partner of the
City.
5. SUMC Parties’ Promises.
(a) Health Care Benefits.
(i) Summary of Intrinsic Benefits.
Stanford University Medical Center is recognized as a global leader in
medical care and research, having pioneered advancements in transplantation
medicine, cancer care, prenatal diagnosis and treatment, and diabetes and
cholesterol treatments. In 2009, the SHC and LPCH provided the following
benefits and services:
36,559 inpatients admitted
48,744 emergency department visits
4,759 babies delivered
$262.6 million in uncompensated medical services, charity care, and
community programs.
The SUMC Parties served 64 percent of Palo Alto residents who required
hospitalization in 2009. The Project will enable the SUMC Project sponsors to
continue this important work, and the addition of more beds for adults and
children will alleviate overcrowding and allow the hospitals to serve patients who
currently must be turned away. The hospitals also provide the only Level 1
Trauma Center between San Francisco and San Jose. The Trauma Center and the
Emergency Department ensure critical community emergency preparedness and
response resources for the community in the event of an earthquake, pandemic, or
other major disaster.
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(ii) Fund for Healthcare Services.
Not later than the Initial Payment Date, and subject to the provisions in
Section 21(p), the Hospitals will designate for Healthcare Services the amount of
Three Million Dollars ($3,000,000), which amount shall increase by 4.5% per
year through 2025, and thereby will total Five Million Six Hundred Thousand
Dollars ($5,600,000) by December 31, 2025. After completing the reconciliation
of construction use tax payments described in Section 5(b)(ii)(C), the Hospitals
shall use the resulting Fund for Healthcare Services by spending the fund in even
increments over a ten-year period from 2026 through 2036 to assist residents of
Palo Alto who have self-payment responsibilities beyond their financial means, to
pay healthcare services (“Patient Service Program”). If in any year less than one-
tenth of the Fund for Healthcare Services is used by the Patient Services Program,
the excess shall be used in any one or all subsequent years or added to the Fund
for Community Health and Safety Programs described in Section 5(a)(iii) below.
The Patient Services Program shall be in addition to the Hospitals’ Financial
Assistance/Charity Care Policy dated August 2010, as amended from time to
time, and in addition to any coverage afforded by the new federal Health Care and
Education Reconciliation Act and subsequent amendments. The Hospitals, in
their reasonable discretion, shall develop criteria for determining whether patients
are qualified to receive assistance from the Patient Services Program based on
Palo Alto residency status and financial need. The Hospitals shall report the
criteria used to determine eligibility for assistance from the Patient Services
Program, comparative criteria used to determine eligibility for assistance under
the Hospitals’ charity policies (in order to verify that the Patient Services Program
is in addition to the Hospitals’ charity policies and other federal requirements) and
their disbursements under the Patient Services Program annually, as part of the
annual report described in Section 12(a). All reporting will comply with
applicable privacy laws and policies, as well as the privacy policies of the
Hospitals.
If at any time the Hospitals and City mutually determine that the Patient
Services Program creates undue administrative burdens or is not needed by the
Palo Alto community in view of other available programs, the Hospitals shall
contribute, in annual installments, the remainder of the funds allocated to the
Patient Services Program to the Community Health and Safety Program Fund
described in Section 5(a)(iii) below.
(iii) Fund for Community Health and Safety Programs.
Not later than the Initial Payment Date, and subject to the provisions in
Section 21(p), the SUMC Parties shall contribute, in a single lump sum payment,
Four Million Dollars ($4,000,000) (the “Community Health and Safety Program
Fund”) to the City, to be held in a separate account and to be distributed to
selected community health programs that benefit residents of the City, which
amount could be spent at the City Council’s discretion in whole or in part on the
Project Safety Net Program. The SUMC Parties and the City shall establish a
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joint committee to evaluate proposals regarding the other specific programs to
receive funding, composed of two representatives selected by the SUMC Parties
and two representatives selected by the City. The joint committee may choose to
coordinate its efforts with the City’s Human Relations Commission, and the
City’s representatives on the committee may be members of the Human Relations
Commission. The joint committee shall make annual recommendations to the
City Council regarding proposed disbursements from the Community Health and
Safety Program Fund, and the City Council shall use its reasonable discretion to
decide whether to accept, reject or modify the joint committee recommendations.
The City shall keep the funds paid by the SUMC Parties to the Community Health
and Safety Program Fund in a separate account, to be used only for the purposes
described in this Section 5(a)(iii). The City shall deliver an annual report of
disbursements from the Community Health and Safety Program Fund in
accordance with Section 12(d) below.
(b) Palo Alto Fiscal Benefits.
(i) Payment of Sales and Use Taxes.
The SUMC Parties shall use their best efforts to maximize the City’s allocation of
sales and use taxes associated with Project construction and operation as follows:
(A) Designation of Project Site for Construction Period
Sales and Use Tax Purposes.
The SUMC Parties shall accrue or self report sales and use taxes for the
benefit of the City pursuant to the applicable regulations of the State Board of
Equalization (the “SBOE”) regulations, and any additional regulations issued or
amendments made thereto, for the purpose of maximizing the City’s allocation of
construction use tax revenues derived from the Project available under the
applicable laws and regulations. To this end, the SUMC Parties shall use their
best efforts to the extent allowed by law to: (i) obtain all permits and licenses
necessary to maximize the City’s allocation of construction use taxes derived
from the Project, including but not limited to California Seller’s Permits, Use Tax
Direct Payment Permits, and any other license or permit necessary or desirable to
maximize the City’s allocation of sales and use taxes derived from the Project; (ii)
designate, and require its contractors and subcontractors to designate, the Property
as the place of sale of all “fixtures” furnished and/or installed as part of the
Project; (iii) designate, and require all its contractors and subcontractors to
designate, the Property as the place of use of all “materials” used in the
construction of the Project; and (iv) require all contractors and subcontractors to
allocate the local sales and use taxes derived from their contracts directly to the
City. The SUMC Parties shall, and shall use their best efforts to require their
contractors and subcontractors to, complete and file any forms as the SBOE
requires to effect the designations required by this Section pursuant to the
applicable regulations of the SBOE. The SUMC Parties shall bear all costs
associated with its activities under this Section 5(b)(i)(A). This Section 5(b)(i)(A)
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does not require the SUMC Parties to establish a purchasing entity or office in the
City of Palo Alto.
(B) Direct Pay Permit for Sales and Use Taxes from
Existing Facilities.
Within thirty (30) days of the Effective Date, the Hospitals shall begin and
diligently complete the process necessary to obtain a use tax direct pay permit
from the State of California in order to increase, on an ongoing basis, the City tax
allocation for the Hospitals’ purchases. The Hospitals shall maintain the use tax
direct pay permit for the Life Of The Project, unless the State of California ceases
to continue to administer the use tax direct pay permit program or a substantially
equivalent program.
(C) Establishment of Retail Sales and Use Tax
Reporting District.
The SUMC Parties shall cooperate in good faith with the City to assist the
City in establishing and administering a Retail Sales and Use Tax Reporting
District that includes the Property and the Project, to enable the City to track the
generation, allocation, reporting and payment of sales and use taxes derived from
the Project. Such cooperation shall include providing the City with a list of all
SBOE Permit Codes assigned to the SUMC Parties’ operations and activities on
the Property and associated with the Project, and the physical locations (e.g.,
addresses) associated with such SBOE Permit Codes.
(ii) Assurance of Construction Use Tax Revenue.
The SUMC Parties shall take the following steps to provide reasonable
assurance to the City that it will receive no less than Eight Million, One Hundred
Thousand Dollars ($8,100,000) in construction use tax revenues resulting from
the Project by December 31, 2025:
(A) Funds To Be Used In The Event Of A Shortfall.
As provided in Section 5(a)(ii), the Hospitals will designate the amount of
Three Million Dollars ($3,000,000), which amount shall increase by 4.5% per
year through 2025, and thereby will total Five Million Six Hundred Thousand
Dollars ($5,600,000) by December 31, 2025.
(B) Monitoring Construction Use Tax Revenue.
During the Construction Period, the SUMC Parties shall use their best
efforts to require Project contractors and subcontractors to report to the SUMC
Parties the permits obtained and payments made pursuant to Section 5(b)(i)(A).
Within six (6) months of the conclusion of each calendar year during the
Construction Period, the SUMC Parties will submit to the City a report to be used
by the City to monitor payment of construction use taxes and to determine the
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share of such construction use taxes that the City has received as a result of the
Project (“Monitoring Report”). The report shall include the following
information: (i) a self-accrual report for the year identifying purchases made,
purchase prices and taxes pertinent to such purchases for owner supplied items;
and (ii) a memorandum for the year identifying contractor, sub-contractor, sub-
contractor vendor, supplier and other similarly situated persons from whom
purchases were made, where such contractor, sub-contractor, vendor, and/or other
similarly situated party may allocate taxes directly to the City rather than through
SUMC Parties' self-accrual system.
Within sixty (60) days of receiving the SUMC Parties’ Monitoring Report,
the City shall provide to the SUMC Parties its determination of the amount of
construction use taxes that it has received as a result of the Project during the
preceding calendar year, along with documentation of the basis for the City’s
determination. In the event that the City’s local share of construction use tax
revenues is diminished due to legislative/and or other legal changes, the City shall
calculate the amount of construction use tax revenue that it would have received
under the local share provisions existing on the Effective Date, based upon the
payments actually paid to the State Board of Equalization by the SUMC Parties
and their contractors and subcontractors, and the City shall add any diminished
amount to the amount it has received to arrive at a total amount of “Construction
Use Tax Revenues Received” as a result of the Project. The SUMC Parties shall
not be required to make up, or assure, to the City that it receives the difference
between the actual amount of construction use taxes that the City has received and
the amount that the City would have received under the local share provisions
existing on the Effective Date. However, as allowed by law and applicable
restrictions, the SUMC Parties will join with the City in opposing any legislative
or legal change that would result in diminution of the City’s local share of
construction use tax revenues because the SUMC Parties recognize that such
diminution could adversely affect City services to the community and to the
Project facilities.
(C) Reconciliation and Payment of Shortage or Surplus.
In August 2026, or as soon thereafter as records are reasonably available,
the City shall provide to the SUMC Parties its determination of the total amount
of Construction Use Tax Revenues Received as a result of the Project, along with
a report documenting the basis for the City’s determination (“Reconciliation
Report”). Within thirty (30) days of receiving the Reconciliation Report, the
SUMC Parties shall notify the City as to any dispute regarding the Reconciliation
Report, and the SUMC Parties shall provide a report to the City documenting the
basis for the SUMC Parties’ dispute. The Parties shall act in good faith to resolve
any and all disputes regarding the Reconciliation Report within ninety (90) days
from the date that the SUMC Parties notify the City of such dispute or disputes.
Shortfall. Within thirty (30) days of the date the Parties reach mutual
agreement as to the total amount of Construction Use Tax Revenues Received as
110614 sh 0130788 16
a result of the Project, the SUMC Parties shall pay to the City the amount of any
shortfall between Eight Million One Hundred Thousand Dollars ($8,100,000) and
the amount of the Construction Use Tax Revenues Received as a result of the
Project, which amount shall be paid in full regardless of whether it exceeds the
amount identified pursuant to Section 5(a)(ii). The amount of the Shortfall
Payment then shall be deducted from the Five Million Six Hundred Thousand
Dollars ($5,600,000) amount that the SUMC Parties designated pursuant to
Section 5(a)(ii), and the remainder of that designated amount, if any, shall be
applied to the Patient Service Program as described in Section 5(a)(ii).
Surplus. Within thirty (30) days of the date the Parties reach mutual
agreement as to the total amount of Construction Use Tax Revenues Received as
a result of the Project, the City shall provide to the SUMC Parties the amount of
any surplus between Eight Million One Hundred Thousand Dollars ($8,100,000)
and the amount of the Construction Use Tax Revenues Received as a result of the
Project (“Surplus Payment”). The SUMC Parties then shall reduce the amount
designated pursuant to Section 5(a)(ii) in an amount commensurate with the
Surplus Payment such that the fund for the Patient Service Program shall total
Five Million Six Hundred Thousand Dollars ($5,600,000), comprised of the
Surplus Payment paid by the City plus the difference between that payment and
Five Million Six Hundred Thousand Dollars ($5,600,000) to be paid by the
SUMC Parties.
(D) Costs of Monitoring and Compliance.
The Parties each shall bear their own costs of compliance with the
provisions of Section 5(b)(ii)(A) – (C), including but not limited to monitoring
payment and receipt of construction use taxes, preparation and analysis of reports,
and reconciliation.
(iii) Funding of Operating Deficit.
Not later than the Initial Payment Date, and subject to the provisions in
Section 21(p), the SUMC Parties shall pay to the City, in a single lump sum
payment, the amount of Two Million Four Hundred Seventeen Thousand Dollars
($2,417,000) for the purpose of assuring that City costs associated with the
Project do not exceed revenues to the City resulting from construction and
operation of the Project. This amount is the discounted net present value of the
projected shortfall in revenues over a 30-year period, based upon the inflation,
cost and revenue assumptions used by the consultant hired and directed by the
City.
(iv) Payment of Utility User Tax.
All requirements and language in Section 2.35.100(a) of the City’s
Municipal Code to the contrary notwithstanding, the SUMC Parties shall pay to
the City a utility user tax at a minimum rate of five percent (5%) of all electricity,
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gas, and water charges allocable to new construction completed as part of the
Project for the Life Of The Project, which rate may be increased by the City as
provided by Section 2.35.100(b) of the City’s Municipal Code.
(v) School Fees.
The SUMC Parties shall pay to the City, who in turn shall forward to the
Palo Alto Unified School District, school fees upon issuance of each building
permit from the City or OSHPD, in the amount that is generally applicable to non-
residential development at the time of payment based upon Net New Square
Footage. For buildings subject to OSHPD jurisdiction, the school fees will be
paid within Thirty (30) days after issuance of a building permit from OSHPD.
(c) Traffic Mitigation and Reduced Vehicle Trips.
(i) Summary of Existing Programs.
The Hospitals provide a robust program to minimize commuting by drive-
alone vehicles, which currently includes the following components:
Incentives to forego driving or to carpool, including cash payments or
other credit for participating in a carpool program, various parking
incentives, online ride matching, pretax payroll deduction for transit
passes, emergency rides home, free car rental vouchers, Zipcar car
sharing credits, and other gifts and rewards.
The free Marguerite Shuttle system, supported in part by payments
from the Hospitals, connecting the Hospitals to local transit, Caltrain,
and local shopping and dining.
The Eco Pass program for hospital employees, allowing free use of
VTA buses and light rail, the Dumbarton Express, the Highway 17
Express, and the Monterey-San Jose Express.
Free use of the U-Line Stanford Express connecting BART, the ACE
train, and Ardenwood Park & Ride to Stanford.
Alternative transportation support and information, such as bicycle
commuter facilities (clothes lockers, showers, bike lockers), transit
pass sales, and various sources of ‘green’ and alternative transportation
information including an ‘alternative transportation website.
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(ii) Menlo Park Traffic Mitigation.
(A) Payment.
Subject to the City of Menlo Park’s agreement to be bound by provisions
substantially similar to those described in Section 21(p) and subject to the City of
Menlo Park’s agreement to use payments received from the SUMC Parties as
described in Section 5(c)(ii)(B), below, the SUMC Parties shall contribute to the
City of Menlo Park a total of Three Million Six Hundred Ninety Nine Thousand
Dollars ($3,699,000) for the City of Menlo Park’s use in connection with traffic
mitigation and other measures to enhance City of Menlo Park infrastructure and to
promote sustainable neighborhoods and communities and affordable housing.
The SUMC Parties shall make this contribution in three equal payments as
follows:
(1) the first payment shall be made not later
than the Initial Payment Date;
(2) the second payment shall be made within
Thirty (30) days from issuance of the first Hospital Foundation Permit; and
(3) the third payment shall be made within
Thirty (30) days from issuance of the first Hospital Occupancy Permit.
(B) Use of Funds.
The amount of Two Hundred Ninety Thousand Dollars ($290,000) shall be used
by the City of Menlo Park prior to January 1, 2018 to install Traffic-Adaptive
Signal Technology at the following two intersections in the City of Menlo Park:
Middlefield Road/Willow Road; and Middlefield Road/Ravenswood Avenue.
The amount of One Million Forty Six Thousand Dollars ($1,046,000) shall be
allocated by the City of Menlo Park to the City’s Traffic Impact Fee Fund to pay
for any improvements for which the Traffic Impact Fee Fund has been
established, which amount is in lieu of the SUMC Project's fair share contribution
toward the cost of construction of one pedestrian/bike Caltrain undercrossing in
Menlo Park; improvements at the Willow Road/Bayfront Expressway
intersection; improvements at the Bayfront Expressway/University Avenue
intersection; and installation of Opticom systems at the following four (4)
intersections: Middlefield Road/Willow Road, Middlefield Road/Ravenswood
Avenue, Willow Road/Bayfront Expressway, and Bayfront
Expressway/University Avenue.
The remainder of the funds shall be used by the City of Menlo Park in its
discretion in connection with infrastructure, sustainable neighborhoods and
communities, and affordable housing.
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(iii) East Palo Alto Voluntary Mitigation.
(A) The Hospitals shall make a payment of $200,000 to
the City of East Palo Alto for roadway and traffic signal improvements scheduled
to be done on the length of University Avenue within the East Palo Alto city
limits. This work includes repaving and restriping/bike lanes to improve both
vehicular and non-vehicular traffic flow.
(B) In the event the SUMC Parties are unable to meet
the trip diversion goal set forth in this Agreement such that the $4 Million penalty
payment is triggered, the City of Palo Alto shall remit $150,000 of the penalty
payment to the City of East Palo Alto.
(iv) Contributions to AC Transit.
The Hospitals shall offer to contribute the following to AC Transit:
(A) Within Thirty (30) days from issuance of the
Hospital Occupancy Permit, the Hospitals shall offer to make a one-time payment
to the Alameda-Contra Costa Transit District (“AC Transit”) of Two Hundred
Fifty Thousand Dollars ($250,000) to be used for capital improvements to the U-
Line to increase capacity.
(B) Commencing within Thirty (30) days from issuance
of the Hospital Occupancy Permit and continuing for the Life Of The Project, the
Hospitals shall offer to make Annual Payments to AC Transit in a reasonable
annual amount, not to exceed Fifty Thousand Dollars ($50,000), to be used for
operating costs of the U-Line to maintain a load factor for bus service to the
SUMC of less than 1.0.
(C) In order to encourage Hospital employees who
commute from the East Bay to use public transit from the East Bay to the Project,
the Hospitals shall use best efforts to lease seventy five (75) parking spaces at the
Ardenwood Park and Ride lot, or an equivalent location, commencing within
Thirty (30) days from issuance of the Hospital Occupancy Permit and continuing
for the Life Of The Project, at a cost not to exceed Forty Five Thousand Dollars
($45,000) per year.
(v) Opticom Payments.
Within Thirty (30) days after issuance of the Hospital Occupancy Permit,
the SUMC Parties shall make the following contributions to mitigate traffic in
Palo Alto.
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(A) Opticom Systems.
The SUMC Parties shall pay Eleven Thousand Two Hundred Dollars
($11,200) to the City for installation of Opticom systems at the following seven
(7) intersections: El Camino Real/Palm Drive/University Avenue; El Camino
Real/Page Mill Road; Middlefield Road/Lytton Road; Junipero Serra/Page Mill
Road; Junipero Serra/Campus Drive West, Galvez/Arboretum, Alpine/280
Northbound ramp. The City shall use its best efforts to cause the Opticom system
to be installed at the intersections listed in this Section 5(c)(v)(A) that are not
located within the City’s jurisdiction.
(vi) Caltrain GO Passes.
Commencing on September 1, 2015, the Hospitals shall purchase annual
Caltrain GO Passes (free train passes) for all existing and new Hospital employees
who work more than 20 hours per week, at a cost of up to One Million Eight
Hundred Thousand Dollars ($1,800,000) per year, which amount shall be adjusted
annually to reflect any change in the San Francisco Bay Area Consumer Price
Index (the “GO Pass Amount”). The Hospitals’ obligation to provide GO Passes
shall continue for fifty one (51) years, or until such earlier date as: (a) Caltrain
discontinues the GO Pass program, or a substantially similar program; (b) Caltrain
increases the cost of GO Passes, or a substantially similar program, such that the
Hospitals’ annual costs would exceed the GO Pass Amount; or (c) Caltrain
service is reduced by such an extent that the Hospitals and the City mutually
determine purchase of annual GO Passes, or a substantially similar program,
would no longer be effective in substantially reducing Hospital employee peak
period trips in order to achieve the Alternative Mode targets specified in Section
5(c)(ix). If the cost of obtaining GO Passes exceeds the GO Pass Amount, the
Hospitals shall have the option to elect either to purchase the GO Passes at the
then applicable price, or to terminate the obligation to provide GO Passes, or a
substantially similar program. If the Hospitals’ obligation to provide GO Passes,
or a substantially similar program, terminates for any of the reasons specified in
this Section 5(c)(vi), the Hospitals shall contribute the GO Pass Amount to one or
more substitute programs to encourage use of transit by Hospital employees or
otherwise reduce peak period traffic trips in the intersections impacted by the
Project as identified in the Project EIR, including but not limited to regional
transportation systems or solutions. The substitute program or programs shall be
mutually agreed upon by the SUMC Parties and the City’s Director of Planning
and Community Environment.
(vii) Marguerite Shuttle Service.
The Hospitals shall fund the reasonable costs, in an approximate amount
of Two Million Dollars ($2,000,000), for the purchase of additional shuttle
vehicles for the Marguerite shuttle service, as and when required to meet
increased demand for shuttle service between the Project Sites and the Palo Alto
Intermodal Transit Station. In addition, for the Life Of The Project, the Hospitals
110614 sh 0130788 21
shall fund as Annual Payments the reasonable costs, in an approximate amount of
Four Hundred Fifty Thousand Dollars ($450,000) per year, to cover the net
increase in operating costs for the Marguerite Shuttle.
(viii) Transportation Demand Management Coordinator.
Commencing on September 1, 2015, and continuing through the Life Of
The Project, the Hospitals shall employ an onsite qualified Transportation
Demand Management (“TDM”) coordinator for the SUMC.
(ix) Monitoring of TDM programs.
The City and the SUMC Parties acknowledge that because use of transit
by employees of the Hospitals is voluntary, and may be influenced by a number
of factors outside of the reasonable control of the Hospitals, such as gasoline
prices, costs and availability of alternative transit, housing costs and availability,
and personal preferences of employees, the Hospitals cannot guarantee the results
of their TDM programs. However, the Hospitals shall monitor the success of
their TDM programs from the date of the Initial Project Approvals through the
Life of The Project. The following interim targets shall be used to measure the
progress toward meeting the desired mode split by 2025. These interim targets
assume that in the early phases of implementation, there may be larger shifts to
alternative modes than the shifts that may occur in later phases of the TDM
program enhancement. For purposes of calculating alternative mode share, any
mode that does not constitute driving in a single-occupant vehicle to and from the
work site shall be considered an “Alternative Mode,” including working remotely
from home.
Target Year Alternative Mode Share Percent Change
EIR Baseline
(2006) 22.9 % NA
Project Approval
Baseline (2011) TBD TBD
2018 30 % 7.1%
2021 33 % +3 %
2025 35.1 % +2.1 %
If the applicable interim target is not met for any two consecutive years
prior to 2025, the Hospitals shall provide alternative transportation funding to the
City in Annual Payments in the amount of One Hundred Seventy Five Thousand
Dollars ($175,000) per year until the earlier of the year 2025 or the year the
applicable interim mode split target is achieved, subject to a maximum of five
Annual Payments. The alternative transportation funding must be used by the
110614 sh 0130788 22
City for local projects and programs that encourage use of alternative
transportation mode uses or otherwise reduce peak period traffic trips in the
intersections impacted by the Project as identified in the Project EIR, including
but not limited to regional transportation systems and solutions. The City of Palo
Alto should consider transportation systems and solutions that also help to reduce
traffic in the City of Menlo Park.
(A) Submission of Reports.
The Hospitals shall submit annual reports showing the current number of
employees employed over 20 hours per week; the number of employees using an
alternative mode share as documented by a study or survey to be completed by the
Hospitals using a method mutually agreeable to the City and Hospitals; and the
efforts used by the Hospitals to attempt to achieve the Alternative Mode targets.
(B) 2025 Mode Split Penalty.
If by 2025, the Hospitals have not demonstrated substantial achievement
of the Thirty Five and One-Tenth Percent (35.1%) target modal split for
alternative transportation modes, the Hospitals shall make a lump sum payment of
Four Million Dollars ($4.0 million) to the City for local projects and programs
that encourage and improve use of alternative transportation mode uses or
otherwise reduce peak period traffic trips in the intersections impacted by the
Project as identified in the Project EIR, including but not limited to regional
transportation systems or solutions. The City shall identify capital projects and
program enhancements for which the funds may be applied. Sample projects may
include contributions towards regional transportation projects of interest to the
City and that are identified within the Valley Transportation Authority—Valley
Transportation Plan or other local planning documents. The City of Palo Alto
should consider transportation systems and solutions that also help to reduce
traffic in the City of Menlo Park. If required, said Four Million Dollar
($4,000,000) payment shall constitute funds to be used by the City to offset trips
by Hospital employees through citywide trip reduction. The Four Million Dollar
($4,000,000) payment shall not relieve the SUMC Parties of any of their other
obligations under this Agreement, including but not limited to their obligations to
continue to attempt to achieve the 35.1% target modal split through
implementation of the GO Pass or substantially similar program, or a substitute
program mutually agreed upon by the SUMC Parties and the City’s Director of
Planning and Community Environment, which shall continue pursuant to the
terms of this Agreement for fifty-one (51) years from commencement of the GO
Pass program. Further, the Hospitals shall continue to implement an enhanced
TDM program, monitor modal splits by Hospital employees, and strive to
maximize use of alternative commute modes by Hospital employees. In addition,
the Hospitals shall continue to meet with the City on a regular basis to identify
potential improvements to the enhanced TDM program. The City shall keep all
payments received from the Hospitals pursuant to this Section 5(c)(ix) in a
separate account (the “TDM Fund”), to be used only for the purposes described in
110614 sh 0130788 23
this Section 5(c)(ix). The City shall deliver an annual report of disbursements
from the TDM Fund in accordance with Section 12 below.
(d) Linkages.
To further encourage use of Caltrain, bus and other transit services, and to
enhance and encourage use of pedestrian and bicycle connections between the
SUMC and downtown Palo Alto, the SUMC Parties shall fund the following
improvements:
(i) Improvements to Enhance Pedestrian and Bicycle
Connection from Intermodal Transit Center to El Camino
Real/Quarry Road Intersection.
Two Million Two Hundred Fifty Thousand Dollars ($2,250,000) for
improvements to enhance the pedestrian and bicycle connection from the Palo
Alto Intermodal Transit Center to the existing intersection at El Camino Real and
Quarry Road, with up to Two Million Dollars ($2,000,000) of that amount going
to the development of an attractive, landscaped passive park/green space with a
clearly marked and lighted pedestrian pathway, benches and flower borders. Not
later than the Initial Payment Date, and subject to the provisions in Section 21(p),
the SUMC Parties shall pay to the City Two Million Two Hundred Fifty
Thousand Dollars ($2,250,000) in one lump sum (the “Intermodal Transit Fund”),
and the City shall be responsible for constructing the improvements described in
this Section 5(d)(i). The City shall keep the Intermodal Transit Fund in a separate
account, to be used only for the purposes described in this Section 5(d)(i). The
City shall deliver an annual report of disbursements from the Intermodal Transit
Fund in accordance with Section 12(d) below. The City shall construct the
improvements described in this Section 5(d)(i) prior to issuance of the Hospital
Occupancy Permit.
(ii) Public Right-of-Way Improvements to Enhance Pedestrian
and Bicycle Connection on Quarry Road.
Four Hundred Thousand Dollars ($400,000) for improvements to and
within the public right-of-way to enhance the pedestrian and bicycle connection
from the west side of El Camino Real to Welch Road along Quarry Road,
including urban design elements and way finding, wider bicycle lanes, as
necessary, on Quarry Road, enhanced transit nodes for bus and/or shuttle stops,
and prominent bicycle facilities. Not later than the Initial Payment Date, and
subject to the provisions in Section 21(p), the SUMC Parties shall pay to the City
Four Hundred Thousand Dollars ($400,000) in one lump sum (the “Quarry Road
Fund”), and the City will be responsible for constructing the improvements. The
City shall keep the Quarry Road Fund in a separate account, to be used only for
the purposes described in this Section 5(d)(ii). The City shall deliver an annual
report of disbursements from the Quarry Road Fund in accordance with Section
110614 sh 0130788 24
12(d) below. The City shall construct the improvements described in this Section
5(d)(ii) prior to issuance of the Hospital Occupancy Permit.
(iii) Stanford Barn Connection.
Up to Seven Hundred Thousand Dollars ($700,000) for improvements to
enhance the pedestrian connection between the SUMC and the Stanford Shopping
Center going from Welch Road to Vineyard Lane, in the area adjacent to the
Stanford Barn. The SUMC Parties shall be responsible for constructing these
improvements prior to issuance of the Hospital Occupancy Permit.
(e) Infrastructure, Sustainable Neighborhoods and Communities, and
Affordable Housing.
(i) Payment.
Subject to the provisions of Section 21(p), the SUMC Parties shall pay to
the City a total of Twenty-Three Million Two Hundred Thousand Dollars
($23,200,000) for use in connection with infrastructure, sustainable
neighborhoods and communities, and affordable housing. The SUMC Parties
shall make this contribution in three equal payments as follows:
(A) the first payment shall be made not later than the
Initial Payment Date;
(B) the second payment shall be made within Thirty
(30) days from issuance of the first Hospital Foundation Permit; and
(C) the third payment shall be made within Thirty (30)
days from issuance of the first Hospital Occupancy Permit.
(ii) Use of Funds.
The amount of One Million Seven Hundred Twenty Thousand Four
Hundred Eighty Eight Dollars ($1,720,488) shall be used in the same manner as
funds collected by the City pursuant to its housing fee ordinance. The City shall
keep the balance of the payments made pursuant to this Section 5(e) (the
“Infrastructure, Sustainable Neighborhoods and Communities, and Affordable
Housing Fund”) in a separate account, to be used only for the purposes described
in this Section 5(e). The City shall deliver an annual report of disbursements
from the Infrastructure, Sustainable Neighborhoods and Communities, and
Affordable Housing Fund in accordance with Section 12(d) below.
(iii) Use of Housing Credit.
The housing credit issued to the SUMC Parties in connection with the
Alma substation relocation and Quarry Substation Lease may be used to offset the
obligations in this Agreement.
110614 sh 0130788 25
(f) Climate Change.
(i) Sustainability Programs Benefit.
Subject to the provisions in Section 21(p), the SUMC Parties shall
contribute Twelve Million Dollars ($12 Million) to the City for use in projects
and programs (including carbon credits) for a sustainable community, including
programs identified in the City’s Climate Action Plan, as may be amended, and
investments in renewable energy and energy conservation. The SUMC Parties’
obligation to make this contribution is conditioned on there being no other non-
voluntary requirement applicable to the Project to participate in Palo Alto
Utilities’ Palo Alto Green Program. The SUMC Parties shall make this
contribution in three equal payments, as follows:
(A) the first payment shall be made not later than the
Initial Payment Date;
(B) the second payment shall be made within Thirty
(30) days from issuance of the first Hospital Foundation Permit; and
(C) the third payment shall be made within Thirty (30)
days from issuance of the first Hospital Occupancy Permit.
The City shall keep all payments made pursuant to this Section 5(f) (the
“Climate Change Fund”) in a separate account, to be used only for the purposes
described in this Section 5(f). The City shall deliver an annual report of
disbursements from the Climate Change Fund in accordance with Section 12(d)
below.
(g) Administrative Costs.
In implementing each of the funds described in this Section 5, the funds
may be used for the Party’s reasonable costs of administering the funds, including
establishing and maintaining the necessary accounts, reporting upon the use and
balance of funds, establishing and implementing procedures to allocate funding,
and other activities to implement the funds’ purposes.
(h) Satisfaction of All Conditions of Approval.
The SUMC Parties shall satisfy all Conditions of Approval by the dates
and within the time periods required by the Project Approvals, subject to such
modifications allowed by this Agreement.
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6. City’s Promises.
(a) Vested Rights to Develop and Use the Property.
City hereby grants to the SUMC Parties the vested right to develop,
construct and use the Project on the Property in accordance with the terms and
conditions of the Applicable Rules, the Project Approvals and this Agreement,
and City hereby finds the Project consistent with the Comprehensive Plan and the
Zoning Ordinance as amended by the Project Approvals. City shall not apply to
the Project any change in the Applicable Rules adopted or effective after the
Effective Date, except as provided in Sections 7 and 8 below.
(b) Permitted and Conditionally Permitted Uses.
The permitted and conditionally permitted uses of the Property shall be
those described in the Hospital Zoning Ordinance. Upon approval by the City,
each conditional use permit issued for the Project shall be vested for the Term of
this Agreement and the provisions of Section 18.77.090 of the City’s Municipal
Code shall not apply to such conditional use permits; provided however, that the
rights of the SUMC Parties to continue and maintain permitted and conditionally
permitted uses on the Property shall be subject to compliance with the terms and
conditions of this Agreement, the other Applicable Rules, and the Project
Approvals.
(c) Maximum Density and Intensity of Uses.
When developed, the density and intensity of use of the Property shall not
exceed those densities and intensities of use set forth in the Hospital Zoning
Ordinance.
(d) Other Development Standards.
All design and development standards not set forth in the Project
Approvals or this Agreement shall be in accordance with the Applicable Rules
and the Subsequent Applicable Rules as applied to the Project; provided such
standards shall not conflict with the Project Approvals or this Agreement.
(e) Subsequent Rules.
Subsequent Rules that conflict with the SUMC Parties’ rights to develop
the Property as provided under this Agreement are applicable to the Project only
under the circumstances described in Sections 7 and 8 below. This limitation
applies to changes made by ordinance, initiative, referendum, resolution, policy,
order or moratorium, initiated or instituted for any reason whatsoever and adopted
by the Mayor, City Council, Planning and Transportation Commission or any
other board, commission or department of City, or any officer or employee
thereof, or by the electorate.
110614 sh 0130788 27
(f) Subsequent Approvals.
City shall not deny or unreasonably delay any Subsequent Approval that is
necessary to the exercise of the rights vested in the SUMC Parties by this
Agreement. Any conditions, terms, restrictions, and requirements for subsequent
Discretionary Actions imposed or required by City, including those provided for
herein, shall not prevent development of the land for the uses and to the density or
intensity of development set forth in the Agreement. Except as provided in
Sections 7 or 8 below. City shall not interpret any Subsequent Approval or apply
any Subsequent Rule in a manner that would conflict with the Applicable Rules or
the Project Approvals or reduce the development rights provided by this
Agreement. Upon City approval, each Subsequent Approval shall be vested for
the Term of the Agreement and the provisions of Sections 6(a) and 6(b) shall
apply to each Subsequent Approval.
(g) Limitation on Architectural Review Approvals.
To the extent that the Project Approvals or Applicable Rules require
further decisions, determinations or actions pertaining to architectural review
“Architectural Review Approval”), the decision in all cases shall be made by the
Director of Planning and Community Environment, after recommendation by the
Architectural Review Board, subject only to appeal to the City Council, pursuant
to Section 18.77.070 of the Municipal Code as set forth in the Applicable Rules,
without review or recommendation by the Planning and Transportation
Commission. Further, in each case, Architectural Approval shall be limited to
determining consistency with the Design Guidelines, the Hospital Zoning
Ordinance, and the findings regarding architectural review set forth in Section
18.76.020(d) of the Municipal Code. City shall process any application for
Architectural Review Approval expeditiously. The provisions of this Section 6(g)
shall apply to each architectural review process undertaken and Architectural
Review Approval granted with regard to any portion of the Project.
(h) Annexation of County Property.
City shall petition the Local Agency Formation Commission (LAFCO) to
annex to City the County Property. The SUMC Parties shall cooperate by
executing all necessary documents, by providing all information requested by
City acting as the conducting authority for purposes of the annexation
proceedings, and by attending annexation hearings and testifying in favor of the
annexation. The SUMC Parties shall be responsible for paying all reasonable
costs of the annexation.
(i) Utility and Storm Drain Connections.
Unless prohibited by a moratorium lawfully adopted by another
governmental agency, or by action taken by City in accordance with Sections 7 or
8, or by state or federal law, City shall allow the SUMC Parties to connect the
110614 sh 0130788 28
Project to the City’s sanitary sewers, storm drains, water system, gas system and
electrical system in accordance with its generally applicable rules in effect at the
time of application for service and shall issue all permits and authorizations
necessary for such connections and service in accordance with such generally
applicable rules. A moratorium shall not prevent the issuance of Discretionary
Approvals or ministerial approvals for the Project, provided that City shall not be
required to allow any connections or provide any services barred by the
moratorium.
(j) Waste Treatment Capacity.
Subject to any limitation imposed by state or federal law, in the event of a
moratorium preventing or limiting sanitary sewer connections, the SUMC Parties
shall have priority for sanitary sewer treatment capacity for the Project over other
unbuilt residential, commercial or industrial development until December 31,
2025. In addition, the SUMC Parties shall have priority over new commercial
space built or approved subsequent to the Effective Date, including but not
limited to retail, office and industrial space, until December 31, 2025. These
priorities apply to both “domestic waste” and “industrial waste.”
(k) Storm Drain Capacity.
Subject to any limitation imposed by state or federal law, in the event of a
moratorium preventing or limiting discharge or increased runoff to storm drains,
the SUMC Parties shall have priority for use of storm drains for the Project over
other unbuilt commercial development until December 31, 2025. The SUMC
Parties also shall have priority over new commercial space built or approved
subsequent to the Effective Date, including but not limited to retail, office, and
industrial space, until December 31, 2025.
(l) OSHPD.
City recognizes that, pursuant to the HSSA, (i) OSHPD has exclusive
jurisdiction of certain aspects of design and construction, including construction
of associated infrastructure, of hospital buildings, including plan review, issuance
of building permits, building inspections, and issuance of certificates of
occupancy, and, (ii) certain OSHPD standards and rules apply to non-hospital
buildings that provide outpatient clinical services. In the event that any OSHPD
requirement conflicts with the Project Approvals, the City shall (a) approve
revisions to Project Approvals or, as necessary, grant Subsequent Approvals for
modifications that are not inconsistent with the Hospital Zoning Ordinance, or, (b)
if necessary modifications would be inconsistent with the Hospital Zoning
Ordinance, promptly and in good faith enter into negotiations with the appropriate
SUMC Parties for such modifications to the Project Approvals as are necessary to
conform to the conflicting OSHPD requirement so that the public benefits and
objectives of this Agreement will be achieved at the earliest feasible date. The
approval of such revisions or modifications shall be determined in the first
110614 sh 0130788 29
instance by the Director of Planning and Community Environment, subject to
review only by expedited appeal to the City Council.
(m) No Other Dedications.
Except as may be required to provide for the installation and maintenance
of City-owned public utilities to the Project, including such easements as may be
required to install and maintain utility laterals required to serve the Project
buildings, and except as otherwise set forth in this Agreement or the Project
Approvals, or as may be agreeable to the SUMC Parties, the SUMC Parties shall
not be required to make any dedications or reservations of the Property, or any
portion thereof or interest therein, or of any other property in connection with the
development, construction, use, or operation of the Project, or any portion thereof.
The Parties shall also cooperate to identify the locations for any new necessary
easements, and the locations of any existing easements that are no longer
necessary and may be relinquished or vacated, to minimize the costs to the Parties
of creating, maintaining, or vacating such easements.
(n) No Other Public Improvements or Financial Contributions.
Except as may be required under the Conditions of Approval, in
connection with the relocation of City-owned public utilities under Welch Road,
the gas line retrofitting on Welch Road, or restoration of any public improvements
impacted by the Project construction, the SUMC Parties shall not be required to
construct public improvements or make financial contributions to City in lieu of
public improvements as part of the Project, except as expressly set forth in this
Agreement, or as may be agreeable to the SUMC Parties, or as provided in the
Project Approvals.
(o) No Obligation to Develop.
The SUMC Parties shall have no obligation to develop the Project, or any
component of it. The SUMC Parties may develop the Project in their sole
discretion in accordance with their own time schedule, subject to the terms and
conditions of this Agreement. The SUMC Parties may develop and construct the
Project in any sequence or phases, in their sole discretion.
(p) Timing for Performance of Conditions of Approval.
The SUMC Parties may request in writing a change in the time of
performance of any Condition of Approval. Within a reasonable time of
receiving the request, the City Manager or his or her designee (a) shall determine
whether additional environmental review is required because of the proposed
change; (b) may condition approval of the proposed change upon changes in the
timing of related conditions or mitigation measures; and, finally, (c) shall
approve, conditionally approve or deny the requested change. Within a
reasonable time of receiving the City Manager’s decision on the request, the
110614 sh 0130788 30
SUMC Parties shall give written notice of its acceptance or of its withdrawal of
the request. The change shall be effective upon receipt by the City of the notice
of acceptance.
7. Exceptions.
To the extent Subsequent Rules (including a moratorium otherwise
lawfully adopted by City) conflict with the Applicable Rules or Project
Approvals, they may be applied to the Project without the consent of the SUMC
Parties only (i) if City determines that application of such Subsequent Rules is
necessary to protect against conditions that create a substantial and demonstrable
risk to the physical health or safety of residents or users of the site to which the
Subsequent Rules apply or the affected surrounding region; or (ii) if such
Subsequent Rules are mandated or required by supervening federal, state or
regional statute or regulation; or (iii) if otherwise provided by this Agreement.
8. Exclusions.
(a) Sewer Facilities, Storm Drains and Runoff.
This Agreement does not affect the SUMC Parties’ obligations, if any, to
pay for or construct improvements in the storm drain system required to
implement the Project, nor does it affect the SUMC Parties’ obligations to meet
any applicable federal, state and local discharge limits and requirements
pertaining to sewer facilities, storm drains or runoff.
(b) Limited Effect on Right to Tax, Assess, or Levy Fees or Charges.
Except as expressly provided herein, this Agreement does not limit the
power and right of the City to impose the same taxes, levy the same assessments,
or require the payment of the same permit fees and charges by the SUMC Parties
as the City requires for all other nonresidential development or property on a
citywide basis. The SUMC Parties shall be required to pay all Development
Impact Fees in effect on the Effective Date, as provided in this Section 8(b),
subject to the SUMC Parties’ right to protest and/or pursue a challenge in law or
equity to the new or increased Development Impact Fee. The SUMC Parties shall
not be required to pay any new Development Impact Fees adopted after the
Effective Date through December 31, 2019, unless such payment becomes due
under the Applicable Rules or this Agreement on or after January 1, 2020.
Further, the City shall not require the SUMC Parties to pay any increase in the
amount of a Development Impact Fee, except as set forth in this Section 8(b) and
the amount of the Development Impact Fees shall be calculated as set forth in this
Section 8(b). All fees, charges, taxes and assessments permitted by this
Agreement, and as modified from time to time, are Applicable Rules or
Subsequent Applicable Rules. For buildings subject to OHSPD jurisdiction, City
fees shall be considered due not later than 30 days after issuance of the Hospital
110614 sh 0130788 31
Foundation Permit from OSHPD. In no event may any fees be paid later than the
date for payment under the Applicable Rules.
(i) All provisions and requirements of this Agreement and the
Applicable Rules to the contrary notwithstanding, the SUMC Parties shall have
the following options with respect to the timing of payment of Development
Impact Fees, and the rates of Development Impact Fees will be calculated as
follows:
(A) If the SUMC Parties elect to pay or prepay all or
any portion of the Development Impact Fees between the Effective Date and
December 31, 2011, the SUMC Parties shall pay such fees at the rate in effect on
the Effective Date;
(B) If the SUMC Parties elect to pay or prepay all or
any portion of the Development Impact Fees on or after January 1, 2012 through
and including December 31, 2019, the SUMC Parties shall pay such fees at the
rate applicable citywide to nonresidential development at the time of payment;
except that the City shall not require the SUMC Parties to pay any increase in a
Development Impact Fee that exceeds an amount calculated according to the rate
in effect on the Effective Date and adjusted to reflect the change in the San
Francisco Bay Area Consumer Price Index from January 1, 2012 to the date of
payment.
(C) If the SUMC Parties elect to pay all or any portion
of the Development Impact Fees on or after January 1, 2020, the SUMC Parties
shall pay such fees at the rate applicable citywide to nonresidential development
at the time of payment, subject to the SUMC Parties’ right to protest and/or
pursue a challenge in law or equity to the increased fee.
(ii) The SUMC Parties shall not receive any credit against any
City Development Impact Fees for any community benefits provided pursuant to
this Agreement.
(iii) Payment of the city-wide Transportation Impact Fees in
accordance with this Agreement shall constitute the Project’s entire fair share
contribution to the following transportation mitigation measures: TR 2.1
(contribution to traffic adaptive signal technology in Palo Alto); TR 2.2
(contribution to Everett undercrossing in Palo Alto); and TR 7.2 (contribution to
Palo Alto Crosstown Shuttle).
(iv) Except as provided in this Section 8(b), the SUMC Parties
shall pay Development Impact Fees in accordance with the Applicable Rules, on
the basis of Net New Square Footage.
(v) Nothing in this Agreement shall preclude the City from
collecting fees from the SUMC Parties that are lawfully imposed on the Project
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by another entity having jurisdiction over the Project which the City is required or
authorized to collect pursuant to applicable laws.
(c) No Limit on Right of City to Adopt and Modify Uniform Codes.
This Agreement does not limit the right of the City, to the extent permitted
by state law, to adopt Building, Plumbing, Electrical, Fire and similar uniform
construction codes, and to adopt local modifications of those codes, from time to
time. Those codes, as modified from time to time, are Subsequent Applicable
Rules.
(d) No Limit on Power of City to Adopt and Apply Rules Governing
Provision and Use of Utility Services.
Except as expressly provided in Section 6, this Agreement does not limit
the power and right of the City to adopt and amend from time to time rules and
procedures governing the provision and use of utility services provided by the
City. These rules, as modified from time to time, are Subsequent Applicable
Rules. If there is any conflict between such Rules and Section 6, the latter shall
control.
(e) California Environmental Quality Act Compliance (CEQA).
The City has prepared and certified an EIR and has imposed mitigation
measures as Conditions of Approval prior to the execution of this Agreement.
This Agreement does not limit the City’s duty to comply with the provisions of
CEQA and the associated Guidelines, and to comply with the provisions of its
own local CEQA procedures, as they may be amended from time to time, that
comply with the provisions of section 21082 of CEQA. However, the City shall
not undertake additional environmental review under CEQA unless required to do
so by CEQA. In the event that any such further environmental review is required
for a Subsequent Approval or other Discretionary Action, it shall be in accordance
with Sections 15162-15164 of the CEQA Guidelines, and the scope of analysis
and evaluation shall be as required by CEQA.
(f) No General Limitation on Future Exercise of Police Power.
The City retains its right to exercise its general police power except when
such exercise would conflict with the vested rights granted under this Agreement.
The police powers so retained and enforceable under this Agreement shall
include, but are not limited to, the enactment of regulations concerning the
disposition of construction and demolition materials that apply generally to the
City.
9. Indemnity.
To the maximum extent permitted by law, the SUMC Parties shall defend,
indemnify and hold harmless the City, its City Council, its officers, employees
110614 sh 0130788 33
and agents (each an “Indemnified Party” and collectively the “Indemnified
Parties”) from and against any claim, action, or proceeding brought by any third
party against the Indemnified Parties to attack, set aside, or void any of the Project
Approvals, or any Subsequent Approvals. The SUMC Parties shall take the lead
role in defending any such claim, action or proceeding, and may, in their sole
discretion, elect to be represented by the attorneys of their choice. The City may,
in its sole discretion, elect to be represented by the attorneys of its choice in any
such action or proceeding, with the reasonable costs of such representation to be
paid by the SUMC Parties. The SUMC Parties and the City shall fully coordinate
and cooperate in the defense of any such action and shall keep each other fully
informed of all developments relevant to such defense, subject only to
confidentiality requirements and any privileges or legal doctrines that may
prevent the communication of any such information. The SUMC Parties’
obligations set forth in this Section 9 shall survive any suspension or termination
of this Agreement, regardless of cause.
10. Cooperation and Implementation.
The Parties shall cooperate to implement this Agreement in a manner that
ensures that all Parties realize the intended benefits of the Agreement. With
respect to the City, such cooperation shall include, but without limitation, diligent
processing of applications for approval of development of the Project that comply
with the Project Approvals, Applicable Rules and Subsequent Applicable Rules,
and the City shall not unreasonably deny or delay any Discretionary Action,
Subsequent Approval or OSHPD approval that is necessary to the exercise of the
rights vested in the SUMC Parties by this Agreement. Such cooperation shall
include, but without limitation, prompt compliance by each Party with all requests
by another Party for materials and information necessary to determine the
responding Party’s compliance with this Agreement, and the diligent provision
and implementation of all community benefits and voluntary mitigation measures
to be provided by the SUMC Parties under this Agreement and the City’s
expenditures of funds for the purposes described in this Agreement.
11. Identification of Applicable Rules.
Prior to the Effective Date, the Parties will use reasonable efforts to
identify and assemble four (4) sets of the Applicable Rules, one (1) set for the
City and one (1) set for each of the SUMC Parties, so that if it becomes necessary
in the future to refer to any of the Applicable Rules, there will be a common set of
the Applicable Rules available to each Party. Failure by City to identify or
assemble written Applicable Rules shall in no manner limit City’s ability to later
identify or use such Applicable Rules.
110614 sh 0130788 34
12. Periodic Review of Compliance.
(a) Periodic Review.
City shall review this Agreement annually, in accordance with the
procedures and standards set forth in this Agreement and City of Palo Alto City
Council Resolution No. 6597 in order to ascertain the SUMC Parties’ compliance
with the terms of the Agreement. The SUMC Parties shall submit an annual
report (the “Annual Report”) to the Director of Planning and Community
Environment (the “Planning Director”), in the form and containing the content
described in Section 12(c) below, each year within thirty (30) days after the
anniversary of the Effective Date. The Annual Report shall be accompanied by
an annual review fee sufficient to cover the estimated costs of review of the
Annual Report. The amount of the annual review fee shall not exceed the City’s
actual, reasonable costs for such review. Within forty-five (45) days of receipt of
the SUMC Parties’ Annual Report, the City shall prepare and submit to the
SUMC Parties a Supplement to the Annual Report, in the form and containing the
content described in Section 12(d) below, to demonstrate the City’s good faith
compliance with the terms of this Agreement.
(b) Special Review.
The City Council may order a special review of compliance with this
Agreement any time the City Council determines that the SUMC Parties may be
in breach of the Agreement. The Planning Director or City Council, as
determined from time to time by the City Council, shall conduct such special
reviews, at the City’s expense.
(c) Annual Report.
The Annual Report to be submitted by the SUMC Parties pursuant to
Section 12(a) above shall summarize the SUMC Parties’ progress on the Project,
including, at a minimum (i) a list of the net new square footage for which a
certificate of occupancy has been received; (ii) a description of the steps the
SUMC Parties have taken to comply with the obligations listed in Section 5 of
this Agreement; and (iii) any other information the City reasonably requires to
determine the SUMC Parties’ compliance with this Agreement.
(d) Supplement to the Annual Report.
The Supplement to the Annual Report to be submitted by the City
pursuant to Section 12(a) above shall include an accounting of the funds received
by the City, including a description of the account balances for each of the funds
that the City is required to maintain under Section 5 of this Agreement (“City
Funds”), the City’s expenditures from each of the City Funds, and the purposes
for which the expenditures were used. The City’s descriptions of the expenditures
shall be at the level of detail the SUMC Parties reasonably determine is necessary
110614 sh 0130788 35
to confirm that the City’s expenditures from the City Funds are consistent with
the terms of Section 5 of this Agreement. The City’s report shall be included in
any hearings held by the City pursuant to Section 12(e) of this Agreement. The
City shall bear the burden of proof that the City has complied with the
requirements of Section 5 for use of funds paid by the SUMC parties.
(e) Procedure.
During either a periodic review or a special review, the SUMC Parties
shall be required to demonstrate good faith compliance with the terms of the
Agreement. The burden of proof on this issue shall be on the SUMC Parties.
During the periodic or special review, the City may rely on information in
addition to that provided in the Annual Report prepared by the SUMC Parties
pursuant to Section 12(a) above. The Parties acknowledge that failure by the
SUMC Parties to demonstrate good faith compliance shall constitute grounds for
termination or modification of this Agreement in accordance with the provisions
of this Section 12.
(i) Upon the SUMC Parties’ submission of the Annual Report
to the Planning Director, the Planning Director shall review the Annual Report
and, based on the Annual Report and any other information available to the
Planning Director relating to the SUMC Parties’ compliance with the Agreement,
prepare and submit a report (the “Planning Director’s Report”) to the City Council
setting forth the evidence concerning good faith compliance by the SUMC Parties
with the terms of this Agreement and the recommended finding on that issue.
(ii) The City Council shall review the Planning Director’s
report, the Annual Report submitted by the SUMC Parties, and any other
information available to the City Council relating to the SUMC Parties’
compliance with the Agreement.
(iii) If, upon completing its review, the City Council finds that
the SUMC Parties have complied in good faith with the terms and conditions of
this Agreement, the review shall be concluded.
(f) Default by SUMC Parties.
If, upon completing its review described in Section 12(e), the City Council
makes a finding, on the basis of substantial evidence, that the SUMC Parties have
not complied in good faith with the terms and conditions of this Agreement, the
City shall provide written notice to the SUMC Parties describing: (i) such failure
to comply with the terms and conditions of this Agreement (referred to herein as a
“Default”), (ii) whether the Default can be cured, (iii) the actions, if any, required
by the SUMC Parties to cure such Default, and (iv) the time period within which
such Default must be cured. If the Default can be cured, the SUMC Parties shall
have at a minimum 90 days after the date of such notice to cure such Default, or
in the event that such Default cannot be cured within such 90-day period but can
110614 sh 0130788 36
be cured within one (1) year, the SUMC Parties shall have commenced the actions
necessary to cure such Default and shall be diligently proceeding to complete
such actions necessary to cure such Default within 90 days from the date of the
notice. If the Default cannot be cured or cannot be cured within one (1) year, as
determined by City during the periodic or special review, the City Council may
modify or terminate this Agreement as provided in Section 12(g) and Section
12(h).
(g) Proceedings Upon Modification or Termination.
If, upon a finding under Section 12(f) and the expiration of the cure period
specified in Section 12(f) above, City determines to proceed with modification or
termination of this Agreement, City shall give written notice to the SUMC Parties
of its intention so to do. The notice shall be given at least ten calendar days
before the scheduled hearing and shall contain:
(i) The time and place of the hearing;
(ii) A statement as to whether or not the City proposes to
terminate or to modify the Agreement; and
(iii) Such other information as is reasonably necessary to inform
the SUMC Parties of the nature of the proceeding.
(h) Hearings on Modification or Termination.
At the time and place set for the hearing on modification or termination,
the SUMC Parties shall be given an opportunity to be heard and shall be required
to demonstrate good faith compliance with the terms and conditions of this
Agreement. The burden of proof on the issue shall be on the SUMC Parties. If
the City Council finds, based upon substantial evidence, that the SUMC Parties
has not complied in good faith with the terms or conditions of the Agreement, the
City Council may terminate this Agreement or modify this Agreement in a
manner mutually acceptable to the Parties to address the Default. The decision of
the City Council shall be final and subject to judicial review as provided in
Section 14, below.
(i) Certificate of Compliance.
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If, at the conclusion of a periodic or special review, the SUMC Parties are
found or deemed to be in compliance with this Agreement, City shall, upon
request by the SUMC Parties, issue a Certificate of Compliance (“Certificate”) to
the SUMC Parties stating that after the most recent periodic or special review and
based upon the information known or made known to the Planning Director and
City Council that: (1) this Agreement remains in effect, and (2) the SUMC Parties
are not in Default. The Certificate shall be in recordable form, shall contain
information necessary to communicate constructive record notice of the finding of
compliance, shall state whether the Certificate is issued after a periodic or special
review and shall state the anticipated date of commencement of the next periodic
review. The SUMC Parties may record the Certificate without cost or expense to
City.
13. Default by City.
If the SUMC Parties determine that City has failed to comply with any of
the City’s obligations under this Agreement, the SUMC Parties may provide
written notice to the City describing its contentions regarding (i) such failure to
comply with the terms and conditions of this Agreement (referred to herein as a
“City Default”), (ii) whether the City Default can be cured, (iii) the actions, if any,
required of City to cure such City Default, and (iv) the time period within which
such City Default must be cured. If the City Default can be cured, City shall have
at least 90 days after the date of such notice to cure such Default, or in the event
that such City Default cannot be cured within such 90 days period but can be
cured within one year, City shall have commenced all actions necessary to cure
such Default and shall be diligently proceeding to complete all such actions
necessary to cure such Default within 90 days from the date of notice. If the
SUMC Parties contend that the City Default cannot be cured or cannot be cured
within one year, or if City fails to cure within the applicable cure period as
provided in this Section 13, the SUMC Parties shall give notice to City of its
contentions before pursuing the remedies described in Section 14.
14. Remedies for Default.
It is acknowledged by the Parties that City would not have entered into
this Agreement if doing so would subject it to the risk of incurring liability in
damages, either for breach of this Agreement, anticipatory breach, repudiation of
the Agreement, or for any actions with respect to its implementation or
application. The Parties intend by the provisions of this Section 14 that none of
the Parties shall have any liability for money damages arising out of a breach of
this Agreement, and no liability in money damages for any claims arising out of
the application process, negotiation, execution and adoption, or the
implementation or application of this Agreement.
Each of the Parties hereto may pursue any remedy at law or equity
available for the breach of any provision of this Agreement, including but not
limited to temporary or permanent injunctive relief or restraining orders, except
that the Parties shall have no liability in damages for any acts which are alleged to
have arisen out of or relate to this Agreement, under any circumstances.
The Parties further acknowledge that money damages and remedies at law
generally are inadequate, and specific performance is the most appropriate
remedy for the enforcement of this Agreement and should be available to all
Parties for the following reasons:
(a) Money damages are excluded as provided above.
110614 sh 0130788 38
(b) Due to the size, nature, and scope of the Project, it may not be
practical or possible to restore the Property to its original condition once
implementation of this Agreement has begun. After such implementation, the
SUMC Parties may be foreclosed from other choices they may have had to utilize
the Property or portions thereof. The SUMC Parties have invested significant
time and resources and performed extensive planning and processing of the
Project in agreeing to the terms of this Agreement and will be investing even
more significant time and resources in implementing the Project in reliance upon
the terms of this Agreement, and it is not possible to determine the sum of money
which would adequately compensate the SUMC Parties for such efforts.
Except for non-damages remedies, including the remedy of specific
performance, the SUMC Parties, on the one hand, and the City, on the other hand,
for themselves, their successors and assignees, hereby release one another’s
officers, trustees, directors, agents and employees from any and all claims,
demands, actions, or suits of any kind or nature arising out of any liability, known
or unknown, present or future, including, but not limited to, any claim or liability,
based or asserted, pursuant to Article I, Section 19 of the California Constitution,
the Fifth and Fourteenth Amendments of the United States Constitution, or any
other law or ordinance which seeks to impose any money damages, whatsoever,
upon the Parties because the Parties entered into this Agreement, because of the
terms of this Agreement, or because of the manner of implementation or
performance of this Agreement.
All legal actions shall be heard by a reference from the Santa Clara
County Superior Court pursuant to Code of Civil Procedure Section 638, et seq.
The parties to the action shall agree upon a single referee who shall then try all
issues, whether of fact or law, and report a finding and judgment thereon and
issue all legal and equitable relief appropriate under the circumstances of the
controversy before the referee. If the parties to the action are unable to agree on a
referee within ten (10) days of a written request to do so by any Party, any Party
may seek to have one appointed pursuant to Code of Civil Procedure section 640.
The cost of such proceeding shall initially be borne equally by the parties to the
action. Any referee selected pursuant to this Section 13 shall be considered a
temporary judge appointed pursuant to Article 6, Section 21 of the California
Constitution.
15. Modification, Amendment or Cancellation by Mutual Agreement.
Subject to meeting the notice and hearing requirements of Section 65867
of the Development Agreement Act, this Agreement may be modified, amended,
or cancelled at any time by mutual consent of the Parties in accordance with the
provisions of Section 65868 of the Development Agreement Act and City’s
Resolution No. 6597.
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16. Superseding State or Federal Law.
In the event that any state or federal law or regulation enacted or adopted
after the date of this Agreement shall prevent or preclude compliance with any of
the provisions hereof, such provisions shall be modified or suspended only to the
extent and for the time necessary to achieve compliance with said law or
regulation and the remaining provisions of this Agreement shall be in full force
and effect. Upon repeal of said law or regulation or occurrence of other
circumstances removing the effect thereof upon this Agreement, the provisions
hereof shall be restored to their full original effect.
17. Notices.
All notices required or provided for under this Agreement shall be in
writing and shall be delivered personally or by overnight courier service or sent
by certified or registered mail, return receipt requested. Any notice shall be
deemed to have been duly given and received upon receipt. Notices to the parties
shall be addressed as follows:
City: City Manager
City of Palo Alto
250 Hamilton Avenue
Palo Alto, California 94301
with copies to: City Attorney
City of Palo Alto, 8th Floor
250 Hamilton Avenue
Palo Alto, California 94301
Director of Planning and Community Environment
City of Palo Alto, 5th Floor
250 Hamilton Avenue
Palo Alto, California 94301
SHC/LPCH: Mark J. Tortorich, Vice President
Planning, Design & Construction
384 Stanford Shopping Center
Stanford, CA 94304
with a copy to: Sarah Diboise, Esq.
Office of General Counsel
Building 170, 3rd Floor, Main Quad
P.O. Box 20386
Stanford, CA 94305-2038
110614 sh 0130788 40
Stanford University: Vice President, Land Buildings and Real Estate
Stanford University
3145 Porter Drive, Building F
Palo Alto, CA 94304
with a copy to: Vice President and General Counsel
Stanford University
P.O. Box 20386
Stanford, CA 94305
Any Party may change its address for notice by giving ten (10) days’ notice of
such change in the manner provided for in this paragraph.
18. Term of Agreement; Force Majeure.
(a) Basic Term.
Except as to those obligations that expressly extend for the Life Of The
Project, or otherwise expressly extend beyond the stated Term of the Agreement,
the Term of this Agreement shall commence as of the Effective Date, and shall
continue for thirty (30) years from the adoption of the Ordinance authorizing this
Agreement or until earlier terminated by mutual consent of the Parties or as
otherwise provided by this Agreement. Upon the termination of this Agreement,
no Party shall have any further right or obligation hereunder except with respect
to any obligation to have been performed prior to such termination, or with
respect to any default in the performance of the provisions of this Agreement
which has occurred prior to such termination, or with respect to any obligations
which are specifically set forth as surviving this Agreement.
(b) Extension for Referendum, Litigation, Default or Moratorium.
If a Party is deprived of a benefit under this Agreement as a result of
referendum of one or more of the Project Approvals, litigation challenging one or
more of the Project Approvals or one or more Subsequent Approvals, a
moratorium, or a default by the other Party, then the Party so deprived may elect
to extend the Term of this Agreement with respect to that benefit for the duration
of the moratorium or default.
(c) Force Majeure.
Performance by either the SUMC Parties, on the one hand, or the City, on
the other hand, of an obligation hereunder shall be excused during any period of
“Permitted Delay.” Permitted Delay shall mean delay beyond the reasonable
control of a Party including, without limitation, an inability to perform caused by
(a) acts of God, including without limitation earthquakes, floods, fire, and other
natural calamities, (b) civil commotion; (c) riots or terrorist acts; (d) strikes or
other forms of material labor disputes; (e) shortages of materials or supplies; and
110614 sh 0130788 41
(f) vandalism. A Party’s financial inability to perform shall not be a ground for
claiming a Permitted Delay. The Party claiming the Permitted Delay shall notify
the other Party of its intent to claim a Permitted Delay, the specific grounds of the
same and the anticipated period of the Permitted Delay within 10 business days
after the occurrence of the conditions which establish the grounds for the claim.
The period of Permitted Delay shall last not longer than the conditions preventing
performance.
19. Assignment; Right to Assign.
(a) Assignment.
(i) Right to Assign.
Each of the SUMC Parties shall have the right to sell, transfer or assign its
interest in the Property, in whole or in part (provided that no such partial transfer
shall be permitted to cause a violation of the Subdivision Map Act, Government
Code section 66410, et seq.), to any person or entity at any time during the term
of this Agreement; provided:
(A) Concurrently with any such sale, transfer or
assignment, or within ten (10) business days thereafter, the transferor shall notify
City, in writing, of such sale, transfer or assignment and shall provide City with
an executed agreement, in a form reasonably acceptable to the City, by the
purchaser, transferee or assignee and providing therein that the purchaser,
transferee or assignee expressly and unconditionally assumes all the duties and
obligations of the transferor under this Agreement.
(B) No sale, transfer or assignment of any right or
interest under this Agreement shall be made without the prior written consent of
the City Council, which consent may not be unreasonably withheld.
Notwithstanding the failure of any purchaser, transferee or assignee to
execute the agreement required by subparagraph (i) above, the burdens of this
Agreement shall be binding upon such purchaser, transferee or assignee, but the
benefits of this Agreement shall not inure to such purchaser, transferee or
assignee until and unless such agreement is executed.
(ii) Release of Transferor.
Notwithstanding any sale, transfer or assignment, the transferring Party
shall continue to be obligated under this Agreement unless such Party is given a
release in writing by City, which release will be provided by City upon the full
satisfaction by the transferring Party of all the following conditions:
(A) The transferring Party no longer has a legal or
equitable interest in the portion of the Property being transferred.
110614 sh 0130788 42
(B) The transferring Party is not then in default and
default proceedings have not been commenced by City under this Agreement.
(C) The transferring Party has provided City with the
notice and executed agreement required under Section 19(a) (i) above.
(D) The purchaser, transferee or assignee provides City
with security reasonably satisfactory to City to secure performance of its
obligations under this Agreement.
Nothing contained in this Section 19 shall prevent a transfer of the
Property, or any portion thereof, to an institutional lender or Mortgagee as a result
of a foreclosure of a Mortgage or deed in lieu of foreclosure, and any lender or
Mortgagee acquiring the Property, or any portion thereof, as a result of
foreclosure of a Mortgage or a deed in lieu of foreclosure shall take such Property
subject to the terms of this Agreement; provided, however, in no event shall such
lender or Mortgagee be liable for any defaults or monetary obligations of the
SUMC Parties arising prior to acquisition of title to the Property by such lender or
Mortgagee; and provided further in no event shall any such lender or Mortgagee
or its successors or assigns be entitled to a building permit or occupancy
certificate for any portion of the Project until all fees due under this Agreement
have been paid to City, until all outstanding obligations of the SUMC Parties have
been performed, and until any and all outstanding Defaults have been cured.
20. Mortgagee Protection.
The Parties hereto agree that this Agreement shall not prevent or limit any
of the SUMC Parties in any manner, at their sole discretion, from encumbering
the Property or any portion thereof or any improvement thereon by any Mortgage
securing financing with respect to the Property or development of the Property.
City acknowledges that the lenders providing such financing may require certain
Agreement interpretations and shall upon request, from time to time, meet with
any of the SUMC Parties and representatives of such lenders to consider any such
request for interpretation. City will not unreasonably withhold its consent to any
such requested interpretation provided such interpretation is consistent with the
intent and purposes of this Agreement. Any Mortgagee of the Property shall be
entitled to the following rights and privileges:
(a) No Impairment.
Neither entering into this Agreement nor a breach of this Agreement shall
defeat, render invalid, diminish or impair the lien of any mortgage or deed of trust
on the Property made in good faith and for value.
(b) Notice of Default by the SUMC Parties.
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The Mortgagee of any mortgage or deed of trust encumbering the
Property, or any part thereof, which Mortgagee, has submitted a request in writing
to the City in the manner specified herein for giving notices, shall be entitled to
receive written notification from City of any Default by the SUMC Parties in the
performance of the SUMC Parties’ obligations under this Agreement.
(c) Notice.
If City timely receives a request from a Mortgagee requesting a copy of
any notice of default given to any of the SUMC Parties under the terms of this
Agreement, City shall provide a copy of that notice to the Mortgagee within
twenty (20) days of sending the notice of default to the SUMC Parties. The
Mortgagee shall have the right, but not the obligation, to cure the default during
the remaining cure period allowed such Party under this Agreement.
(d) Transfer of Ownership.
Mortgagee shall have the rights set forth in the last paragraph of Section
19 above.
21. Miscellaneous.
(a) Effect of Recitals.
The Recitals are intended in part to paraphrase and summarize this
Agreement, however, the terms, covenants and conditions of this Agreement are
expressed with particularity in Section 1, et seq. and the rights and obligations of
the Parties are to be determined by the terms of the Agreement and not by the
Recitals. To the extent the Recitals provide factual context for the Agreement,
they may be considered when interpreting the terms and provisions of the
Agreement.
(b) Construction.
As used in this Agreement, and as the context may require, the singular
includes the plural and vice versa, and the masculine gender includes the feminine
and neuter and vice versa.
This Agreement shall be construed as a whole according to its fair
language and common meaning to achieve the objectives and purposes of the
Parties. This Agreement has been reviewed and revised by legal counsel for each
Signatory Party, and no presumption or rule that ambiguities shall be construed
against the drafting Party shall apply to the interpretation or enforcement of this
Agreement. Each Signatory Party has consulted with counsel and determined that
this Agreement accurately and completely reflects the agreement of the Parties.
The captions of the sections and subsections of this Agreement are solely
for the convenience of reference and shall be disregarded in the construction and
interpretation of this Agreement.
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(c) Severability.
If any terms of this Agreement are determined to be invalid, void, or
unenforceable, the remainder of this Agreement shall not be affected to the extent
the remaining terms are not rendered impractical or impossible to perform taking
into consideration the purposes of this Agreement.
(d) Time.
Time is of the essence of this Agreement and of each and every term and
condition hereof.
(e) Waiver.
No waiver of any provision of this Agreement shall be effective unless in
writing and signed by a duly authorized representative of the Party against whom
enforcement of a waiver is sought. No waiver of any right or remedy in respect of
any occurrence or event shall be deemed a waiver of any other right or remedy or
in respect of any other occurrence or event.
(f) Governing State Law.
This Agreement shall be construed in accordance with the laws of the state
of California.
(g) Determination of Compliance.
At any time during the Term of this Agreement, any Party or its lender,
may request any Party to this Agreement to confirm that to the best of such
Party’s knowledge, no defaults exist under this Agreement or if defaults do exist,
to describe the nature of such defaults. Each Party shall provide such a
determination to such lender or other Party within forty-five (45) days of the
request therefor. The failure of any Party to provide the requested determination
within such forty-five (45) day period shall constitute a confirmation that to the
best of such Party’s knowledge, no defaults exist under this Agreement. Requests
for such determinations shall be made in writing and as required by Section 17
above.
(h) Entire Agreement.
This Agreement contains the entire understanding and agreement of the
Parties. There are no oral or written representations, understandings,
undertakings, or agreements that are not contained or expressly referred to herein,
and any such representations, understandings, or agreements are superseded by
this Agreement. No evidence of any such representations, understandings, or
agreements shall be admissible in any proceeding of any kind or nature relating to
the terms or conditions of this Agreement, its interpretation, or breach.
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(i) No Third Party Beneficiaries.
This Agreement is made and entered into for the sole protection and
benefit of the signatory Parties and their successors and assigns, including
Mortgagees. No other person shall have any right of action based upon any
provision of this Agreement.
(j) Authority to Execute.
Each person executing this Agreement warrants and represents that he or
she has the authority to bind the signatory Party for which he or she is signing to
the performance of its obligations hereunder.
(k) Administrative Appeal.
Whenever in the Applicable Rules or Subsequent Applicable Rules any
requirement or action by the SUMC Parties is conditioned upon the approval or
satisfaction, however expressed, of any entity other than City, such condition shall
not be interpreted as providing the third party the right to make any final decision
other than as may be authorized by law other than the Applicable Rules or
Subsequent Applicable Rules. Where a third party has no right authorized by law
other than the Applicable Rules or Subsequent Applicable Rules to make a final
decision, a condition requiring approval or satisfaction of such third party,
however expressed, shall mean that the third party shall provide, as appropriate,
advice, consultation, a recommendation and/or an initial decision regarding the
condition. The actual determination in such case will be made by the official or
entity of City required or authorized to make such determination in accordance
with the applicable provisions of the Palo Alto Municipal Code as set forth in the
Applicable Rules. Appeals from determinations made by City officials or entities
shall be made in accordance with applicable provisions of the Palo Alto
Municipal Code as set forth in the Applicable Rules.
(l) Exhibits.
The following exhibits to which reference is made in this Agreement are
deemed incorporated herein in their entirety:
Exhibit A – Property Description
Exhibit B – Initial Project Approvals
If the recorder refuses to record any exhibit, the City Clerk may replace it
with a single sheet bearing the exhibit identification letter, stating the title of the
exhibit, the reason it is not being recorded, and that the original, certified by the
City Clerk, is in the possession of the City Clerk and will be reattached to the
original when it is returned by the recorder to the City Clerk.
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(m) Signature Pages.
For convenience, the signatory Parties may execute and acknowledge this
Agreement on separate signature pages, which, when attached hereto, shall
constitute one complete agreement.
(n) Precedence.
If any conflict or inconsistency arises between this Agreement and the
Applicable Rules or the Subsequent Rules, the provisions of this Agreement shall
have precedence and shall control over the conflicting or inconsistent provisions
of the Applicable Rules or Subsequent Rules.
(o) Recordation.
Whenever recordation is required or may be required by either Party, City
shall be responsible for recordation. If City fails to record a document when
required, the SUMC Parties may, but are not obligated to, record the document
and by doing so the SUMC Parties do not assume the duties or obligations of City
established by this Section or the Development Agreement Act nor does it waive
any right it may have to compel City to properly perform its duties and
obligations. The failure of City to record or to properly record this Agreement or
any other document as provided herein shall not affect or limit in any way the
SUMC Parties’ rights to enforce this Agreement and to rely upon it.
(p) Referendum or Challenge.
In the absence of a referendum petition, City shall not unilaterally submit
the Project Approvals or the ordinance approving this Agreement to a referendum
by action of the City Council on its own motion without the SUMC Parties’
consent. In addition to the remedies set forth in Section 18(b), if the Project
Approvals or the ordinance approving this Agreement is the subject of a
referendum, or if litigation is commenced seeking to rescind the Project
Approvals or the City’s decision to enter into this Agreement or to declare this
Agreement void (“Legal Action”), less than one year from the filing with the
County Clerk by the City of the Notice of Determination following the second
reading of the ordinance approving the Hospital District zoning and the ordinance
approving this Agreement (the “NOD”), each Party shall have the right to
terminate this Agreement by written notice to the other Parties no later than thirty
(30) days after the event that gives a Party the right to terminate, or such later
time allowed in writing by the non-terminating Party or Parties. Each Party’s right
to unilaterally terminate this Agreement as set forth in this Section 21(p) shall
expire one year from the date of the filing of the NOD. The Parties may also, at
any time by mutual agreement, suspend performance of all or part of the
obligations in this Agreement pending the outcome of any such referendum or
litigation.
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(i) City’s Reimbursement Obligation.
If the Project Approvals or the Ordinance approving this Agreement is
challenged by a Legal Action as described above in Section 21(p), the City shall
return payments made by the SUMC Parties to the City according to the following
requirements:
(A) If the Legal Action is filed with the court before 90
days have elapsed from the filing of the NOD, then the City shall return all
payments made by the SUMC Parties pursuant to Section 5 of this Agreement,
within 30 days of the City’s receipt of a written request by the SUMC Parties.
(B) If the Legal Action is filed with the court more than
90 days but less than one year after the filing of the NOD, then the City shall
return payments made by the SUMC Parties pursuant to Section 5 of this
Agreement, within 30 days of the City’s receipt of a written request by the SUMC
Parties, as follows:
(1) Section 5(a)(iii) (Fund for Community
Health and Safety Programs) Payments.
The City shall return to the SUMC Parties such portions of payments
made by the SUMC Parties pursuant to Section 5(a)(iii) that have not been
disbursed through the City’s Human Relations Committee or otherwise, or
contractually committed to a third party community health care program by the
City.
(2) Section 5(b)(iii) (Fund for Operating
Deficit) Payments.
The City shall return to the SUMC Parties such portions of payments
made by the SUMC Parties pursuant to Section 5(b)(iii) that have not been
contractually committed by the City to a third party.
(3) Section 5(e)(i) (Infrastructure, Sustainable
Neighborhoods and Communities, and
Affordable Housing Fund) Payments.
The City shall return to the SUMC Parties such portions of payments
made by the SUMC Parties pursuant to Section 5(e)(i) that have not been
contractually committed by the City to a third party.
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(4) Section 5(f)(i) (Sustainability Programs)
Payments.
The City shall return to the SUMC Parties such portions of payments
made by the SUMC Parties pursuant to Section 5(f)(i) that have not been
contractually committed by the City to a third party.
(C) If the Legal Action is filed with the court one year
or more after the filing of the NOD, and results in a final judgment that materially
impairs the SUMC Parties’ vested rights under this Agreement, then the City shall
have no obligation to return any payments already made by the SUMC Parties to
the City pursuant to this Agreement, and all of the Parties’ outstanding obligations
under this Agreement shall be suspended until the Parties have mutually agreed to
either reinstate or terminate this Agreement.
(ii) Effect of Suspension or Termination of Agreement.
If the Parties mutually agree to suspend performance of all or part of the
obligations in this Agreement pending the outcome of the Legal Action pursuant
to Section 21(p) above, the agreement to suspend performance shall address the
terms under which the SUMC Parties’ payment obligations under Section 5 shall
be reinstated.
In the event that the SUMC Parties unilaterally terminate this
Development Agreement pursuant to Section 21(p), the City may elect at its
reasonable discretion to revoke the conditional use permit for the Project in whole
or in part, and the SUMC Parties will not contend that commencement of
construction elsewhere on the Property has vested the SUMC Parties’ rights to
construct structures for which construction has not yet commenced. The Parties’
rights and obligations set forth in this Section 21(p)(ii) shall survive the SUMC
Parties’ unilateral termination of this Agreement pursuant to the provisions of
Section 21(p).
(iii) Limit of City’s Reimbursement Obligations.
Except as specifically set forth in this Section 21(p), the City shall have no
obligation to return any payments made by the SUMC Parties pursuant to this
Agreement.
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IN WITNESS WHEREOF, this Agreement has been executed by the
parties as of the day and year first above written.
ATTEST: CITY OF PALO ALTO
______________________________ _____________________________
City Clerk Mayor
APPROVED AS TO FORM:
______________________________
City Attorney
APPROVED:
______________________________
City Manager
APPROVED AS TO CONTENT:
_____________________________
Director of Planning and Community Environment
STANFORD HOSPITAL AND CLINICS
By: _________________________
Name: _______________________
Title: ________________________
LUCILE SALTER PACKARD CHILDREN’S HOSPITAL AT STANFORD
By: __________________________
Name: ________________________
Title: _________________________
THE BOARD OF TRUSTEES OF THE LELAND STANFORD
UNIVERSITY
By: ___________________________
Name: _________________________
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Title: __________________________
EXHIBIT A
Legal Description
110614 sh 0130788 51
110614 sh 0130788
52
Exhibit B
Initial Project Approvals
A. Approval of the resolution adopting changes to the Comprehensive Plan to
recognize taller building heights at SUMC, to exclude hospital, clinic and
medical school use areas from the citywide and area specific non-
residential growth limits, and changes to the Comprehensive Plan Land
Use Map;
B. Adoption of an ordinance amending the municipal code to establish a new
“Hospital” zone district and amending the sign code and tree code to be
consistent with the Hospital Zone regulations;
C. Adoption of an ordinance approving a thirty–year development agreement
between the City of Palo Alto and the Applicants that would grant certain
development rights in exchange for certain public benefits;
D. Adoption of a Record of Land Use Action approving a conditional use
permit that would allow specific hospital, medical office, and related
uses in the Hospital Zone;
E. Architectural Review Board Approval of the following:
1. Stanford Hospital;
2. Lucile Packard Children’s Hospital expansion;
3. School of Medicine, Foundations in Medicine 1 building (FIM1);
4. Renovation of the existing Hoover Pavilion;
5. Medical Office Building and Parking Garage;
6. Surface Improvements along Welch Road, and Durand Way; and
7. SUMC Design Guidelines.
F. Adoption of a Resolution annexing an approximate 0.65 acre site from
Santa Clara County; and
G. Acceptance of SUMC Area Plan Update.