The URL can be used to link to this page

Home My WebLink About0540.092j I I \ I o ~ . > > . . ., .~,: '. ""./,':.'" -- December 3, 1~92 HONORABLE CITY COUNCIL PLANNING COMMISSION Palo Alto, Ca'ifornio StanforJ's Proposed Extension of Sand Hill Road and fxpansiDn of th~ Shopping Center Kembers of U'II! COlTlTliss;on and Ccum:il: REPORT IN BRIEF Stanford has recently submitted an applfcat10n for a proposed project that ".uld: (.) extend .nd improve Sond Hill R.od, (b) cl.s. ~rbor.t"m R •• d and construct a new roadway behind the Saks/Nardstrom site, and (c) expand the St •• ford Shopping Center by ,dding I~O,OaO squ.re feet of retail ,pace .nd parking decks to pro~ide 700 additional parki~g sp~ces. The application a1so inclu~es a proposal that tn~ City participate financially i~ the cast of t~e roadway 1mprovements by providing $2,150,000 of the $;,100,000 roadwoy construction budget. N~rmal1y, t~e next appropriate step would be for the City to proceed with the preparation of an Environmental Impact Report for the proposed project. The preparation of a scope of services to hire a consultant to prepare the EIR is current 1 y underway. However I due to the s i 9n i fi c.ance of the proj eet as we 11 as the proposal that the City participate financially in the costs of the roadway improY£!mE'nts, a study session was felt to be app:ropriate, prior to proceeding through the (IR process. The purpose of tne December 7 Joint Planning Commission/City Council Study Sess;~n is to pro~ide City and University representatives ~ith an opportunity to unde~stand and discuss the pro~Qs~d Sind Hill Road Extension/Stanford Shopping Center Expansion Proje,t. The purpose of this staff report is to provide background information relevant to tn~t discuss;~n. ORGAHIlATlON OF AND OBJECTIVES fOR THE STUDY SESSION The primary objective of the O~cember 7 Planning Commission/City Counctl Study Session is to provide City and University representatives with an oppo~tunity t~ revjew and discuss the proposed Sand Hil' Road Extension/Stanford Shopping Center ExpanSion Project. No decisions can be made because of the Study Session format, and because these matters will be tne subject of noticed, CMR:540:91 m,. £ IMGil"' r '. - evidentiary pubiic hearings at some p(1int in the future. Further, any substantive decisior.s Dn the proposed project require completl0~ of an Environmental Impact Rcport. City and Univ~rsity staffs concu~ that discussi~n of the project ~ill be facilitated by having Stanford staff initially present an overview of Stanford planning efforts, espe~ia11y as they relate to iand within th~ City and issues of concern to the City. T~us an outline of the Study Sess~on includes: PrHentation by Stanford staff of the status of iJl1iver.s.ity plannil'l9 activitiesj Discussion/questions and a~swers regard~ns the first presentation; Presentatior, by Stanford staff of the proposed' Project; and -Discussion/questions and answers regard~ng the second presentation. BACKGROUND INFORMATION R,GARDING THE [XT(NSION OF SAND HIll ROAD Sand Hill Road extends from Interstate 280 easterly to it5 terminus at Arboretum Read. StanfDid submltted proposals in 1976 and 1984 to extend Sand Hill Road to E1 Camino Real. Extension of the road a150 involved consideration of various read widening alternatives. For a variety of financial, legal and political reasons, no suc~ project ~as been implemented. fn 1987, the cities of Palo Alto and Menlo Park, along with Stanford university, igreed to pursue-further disc'Jssions regarding pctenthl improvement. to Sand Hill Road. A Joint Policy Committee (JPC) was formed consisting of t~o City Council members from Pale Alto, two City (Gunc;l members f~m Menlo Park, and two Vice Prp~idents frDm Stanford University. Tnis effort focused on identifying conceptual alternatives and develDping a ·Procedural Frame~ork· for a continuing process leading to the preparation of an Environmental Impact Report. In December 1389, (ouncil directed staff to circulate a RE',quest for Proposals to prospective consultants to provide the necessary services for the prepa~ation of an environm~ntal document for a proposed Sand Hil1 Raad improvement project {CMR:S65:gJ, based upon tt1e infcrmation alid alternatives deve10ped as part of the preceding procedural framework efforts. In Novembe-r 1990, (ouncfl atj<lpted oil staff recomendatian to approve a: cnnsultant agreement with EfP Associates for the preparation of an [nvironmental 1mpact Report for the extension and related improv~me~ts to Sand Hill Road (CHR:567:0). At that time, the Council diretted that: (I) an ex;stfng separate agreement (Sand ~i)l Corridor Study Agreement) between Stanford and Palo Alto be macH'led and (2) the Joint Policy Corrrnittee for Sa.nd Hill Road be disbanded. On September 3, 1991, the Council appro'l!ed the contract with EIP Assodates for the preparation of the EIR for Sand Hill Aoad. Subsequently, the contract was fu11y executed with an effectiVE date of September 30, 1991; and tne formal start date was established as November I, )991. CHR:540:91 11/3/92 Page Z r On ~cvemb!r 20, 1991, Stanford requested that the City delay the start of the Sand Hill Road f!R until February I, 1992, in ~rder to provide additional tiMe for them to refine plans for the Stanford West ~Iousing de'lelcj:1Hlcnt and the uJ'date of the regiorlal plan for the Medical Center. Consequer,t1y. City staff adv1sed [It" Associates to suspend further work on the preparation of the ErR until further notice. An informational staff report {CMR:54S:91) regarding the status of the Sand Hill R~ad study W3$ provid~d tc the Council in December 1991. Since November 1991, Stanford has gone through an internal reevaluation re9a~ing Sand Hi11 Road and otnp.r related development projects and has now conclt.1ded: {l.l that tney no l{1nger wish to prDceed with the previously agreed upon Sand Hill Road project and EIR ,tudy and (Z) that they now wish to proceed with a new and different project involving both the Stanford Shopping Center and Sind Hill Road. It is this new projc(t, involving an expansion of the Stanford Shopping Center and the extension of Sand Hill Road, that is the focus of this staff rep~rt and Council study session. [t is staff's understanding with Stanford that the existing cantract~ between the City of r.10 Alto and the rIP Associates for the preparation of a Sand Hill Road EIR (executed September 30, 1991), .il1 be formally terminated, onc, Stanford formaliles such a request 1n writing to the City. The term1nat;on of this contract fs based upon the ct.ange in the scope of the project being propDsed and a desire to closely ccordinate the environmental study for this new project with t~e env;ronme~ta' study for the Stanford West housing proje~t; and it has ncthing to rlo with the .bility of £IP Associates to perform the necessary work, or the pr~gress of sy,h work. rIP Assoc;ates has been ve.ry understanding throughout this c.ofwcluted proc.ess arid has al'llays expressed an interest in, and readiness to proceed with, the work. It is also staff's understanding wit~ Stanford that the existing Sand Hill Corridor Study Agree~ent between Stanford and Palo Alto is to be formally terminated by mutual consant and not replaced with any similar type of agreement. MAJOR [LEKENTS OF THE PROPOSED PROJECT Attachment A is the project appl icatian submittec to the CHy on October 20, 1992. Key elements {If the project include: 1. W;dening of Sand Hill Road to four lanes from Santa Cruz Avenue to Arbor~tum Road and a four-lane extension of Sand Hill R·nd fram Arboretum Road to E1 Camino Real; 1. Abandonment of the City's roadway easement for Arboretum Road between Sand Hill and Qu~rry Roads (with City retention of the eX1ti~g uti1ity torridor and easement i~ thE Arboretum ~oad al ignment) i 3. Construction of a new pri~3te road south of the Saks/Nardstrom site. connecting Sand HHl and Quarry RIJad'sj CMR:540:91 12/3/92 p;\P'OY\n~,..... Page 3 • ow I , ! i ! o 4. Addition of approximately 140,000 square feet of retail space to the Stanford Shopping Center. located primarily in the ~rea between the main shcpping c:entH ana' the Seks!r~ord.:;tr{Jm S1 te; and 5. Construction of three new single·storj parking decks and addition of a second deck to the existing parking structure for a net gain of 700 parking spaces. Construction of the roadway portions of the project Gre estimated to cost $9,100,000 in 1992 dollars. The (ost estimates assume that St3nford ~il1 construct the roadways to City stind~rd~. A very important element of the proposa1 is that the City financia11y participate by oroviding 5,,150,000 of the S9,lOO,OOO roadway construction budget. The portion of the roadway project from the Bridge west to the Santa Cruz/Sand Hill intersection w1l1 need appr~~al and permits from the City of Menlo Park. Under conventional environmental review procedures, the agency with the major portion of the project is t~e lead agency and other agencies are responsibTe 1gen'i~s. lhe lead agency prepares the Draft Environmental Impact Report in close consultatiGn with responsible agencies. Palo Alto and Menlo Park staffs have discussed the project revie~ process and agreed that there will be early (onsultation with Menlo Park anrl o~going cpp~rtunities for involvement in the ~~ft EIR. The specifics of that involvement will be resolved in the next weeks. RELATION OF SAND HILL/SHOPPING (ENTER PROPOSAL TO PROPOSED STANfORD WEST HOUSING PROJECT I~ June 1992, Stanford and the Sand nill Senior Partn~r~ submitted two applfcations for deveiapment of the 72-acre Stanford West site of Sand Hill Road (t~e 46-acr~ open ire a and the Z6-acre former Children's Ho~pltll Site). T~e new Stanford West projects (onsist of: 1) an application by the Senior P~rtners to construct 3as units of senior condominiums, i 7l-unit issist~d H'/ing facility, a 54-room skilled nursing facility and a 7,500-sQuare-foot Age Center, ~nd 21 an appllcat1or. by Stanford UniYersity to construct a 750- unit apart~nt/towrthouse co~domir,ium project. These applications "Were de.clared' i~clJmp1ete ilnd an ej'\vironmental impact rep')rt was requirefj by City ,taff. The circulation plan for the 72 acres has a m~jor entrance it Sand Hill an~ Arboretum Raads_ The Sand H~11 Road ExtenSion/Shopping Center EX~insian project wou1d requi r~ redesign of the Stanford West pr{lpp:sal to modify the circulation system to shift the Arboretum entrance, 50 tnat it ~iil be across from the proposed new road south of the Nordstrom/Saks site. City and University staffs h3ve agreed that both the Stanford West Erp. and the Sand Hill Extension/Shopping Center Expansion [JR, including the traffic sect~ons, shouTa' be done by the same consultant team. (tty staff continues to w~rk on the Re~uests fer Proposals for the two EIRs and hopes to issue the RFPs in January 1993. C~R:S40:92 p:\~."".. 12/3/91 Page 4 • o It is important to emphasizoE-Hat U1e two projects are independent proposa1 s that will be processed and decided upon separate1y. Ho~ever. they ar~ contiguous and interrelated in terms of physical development an~ environmental impacts. lherefcr~, coordinated evaluation and consideration is extremely advantageous. Some members of the (ommunlty have assumed that the Roa~ Extension project is necessary for the Stil.nford West housing project to be approved. When a previous Stanford \IIest housing pr{JposaT was evaluat~d in the early 19£05, approval of the housing re4u;rea' nurr.erous traffic: mitigations but the am<lunt of additional traffic going to and from £1 Camino Real did not require extension of Sand Hill Road. This issue will be re-analyzed in the two new HRs. INITIAL cln S,AFF REACTIONS TO STANFORD'S PROPOSAL Roadway Mqdificati..Qli The Palo Alto Comprehens.ive Plan land Use Map has contained an extens;on of Sand Hill Road from Arboretum Road to fl Camino Rea' since the 1976 adoption ~f the PTan. In the 19705 and 19805) staff recommended c~nst~uction of the Extens;cn based on the public va1ue of a direct connection to El Camino Real and the benefit to tne ShoPpin9 Center ef removing the traffic that use~ the maln entrance and parking ]~t to go to and frem Sand Hill Read. These hlstoric factors are still very ev;d2nt, and staff ~as encouraged Stanford to a.gain seek. approval of a Sand Hill Road extension project. It is important to emphasiz~ that past staff recommendations have in~luded substant1al traffic mitigations, and iny future staff recclTJ!lendation would be made after completion of an Environmental Impact Report and would incorporate in-depth re¥lew of the findings end mitigations identified in the fIR. Comprehensive Plan Transportation Program 19 is: "Reduce traffic: congestion on Sind Hill Road while prohibiting a direct connection from Sand Hill Road to P.lo A1to Avenu~/Alma Street across ET Camino Real." Stanford~s propesal ;s consistent with Program 19. While th~ Draft [IR wi11 need to review an alternative that would connect Sand Hill Road with Palo Alto Avenue/Alma Street, staff's intention is to find a way for a Sand Hill Road extension to be consistent with Program 19. The proposal to close Arboretum Road and to provide a new connection between Sand Hill and Quarry Roads has not b€En previolJsly identifted or evaluated. While staff does not see any inherent prcblems, the analysis in the Draft £IR will be crtlchl in formulating staff's recorwnendation. [xpansion Df the Shopping Center One of the outc~mes ~f the Citywide Land Use and Transportation Study~ appruved by the City Couner} in 1989, was the imposition of a 65.000-square foot expansion ca~ on the Stanford Shopping Center. This cap ~as adopted pending resolution of the traffiC and parking problems in and near the (enter. As of No¥ember 1992~ approximately 15,000 square feet have been added since the cap was imposed, lea¥ing 50 1 000 square feet of development potential. CMR:540:9, ll/lin Page 5 The Stanford proposal's to add 140 1 000 sqvare feet of retail space in tne area between the ma~n center and the Saks/~ordstram site. Some of the square footage would be located a1o~9 the west side of the existing parking de(~, and !r.ost of tne new space would form the connection across the to·be·abandoned Arbor~tum Road area. Initial staff reactions to tn! expar.5~on concept includ~: If the existing parking and especially traffic problems primarily associated wit,.. Sand Hill R~ad can be resolved through con~truction of the Exten'Sfon, then there is no reason to retain tn! current square footage cap; and consideration can be given to additional sQuare fo{!tage beyond the current limit. Connection of the miln center with the Saks/Nordstrom site is logical and would enhance the functioning of the entire shopping cenier. The retail competitiveness of larger snapping centers has become in part related to the provision of ·~ini anchor~ stores (e.g .• the expanded Gap, Polo), and the expansion proposed would facilitate these as we11 as smaller USE's. Tne retail environment will become e~en more competitive in the future and expansion of tne Center, by providing opportunities for new retail locations, appears to be in the best interest or the Center. In calendar 199J, t~e Shopping Center pro~ided S3,!68,I80 of sales tax re~enues to the City, or 23.5 percent of all sales tax revenues, and efforts t~ keep the Center competitive and modern are in the City's long-range financial best interests. kitv Financial Participation Reacti~ns to the proposal for the City to participate financially in the road portion of this project can focus on the general policy of C,ty financial participation, the nature of the trafflc problems being addressed, and the finanCial value to the City of the ShoPP,ng Center Expa~sion. lhe extent to which a municipality and tne property o~ners ha~e fjnancial responsibility fur public improvements va~ies by jurisdiction and the nature of the improvement. for example. in many jurisdictions, replacement of water and sewer 1 i nes and (lld' sidewalks is partially or entirely the property o~er's financial responsibility. In Pale Alto, these types of physical repairs are paid for out of City re~enlies. Jt is Quite comon for jurisdictions. based on poter-tial economic benefits 1 to pay for physlcal improvements (e.9., roads, parkfng) associated wit~ a municipal revenue generator. Some jurisdictions, such as tne City of Mountain View, pyovide financial incentives to revenue generators (e.g. I among other incentives, Mountain V~ew helped pay for the land in or~er to have a CasteD store locate in tha city). During at least the past 30 years, Paio Alta has not used large amounts of general City revenues to help pay for roadway a~d related improvements associated w1t~ pri~ate development proposals. However, this is CHR:S40:S2 11/3/92 Page 6 .,"",'~ .~~ ,.---------- , , , o a pol icy issue. and there IS no inherent reaso., why the City can not participate in t~€se types of expenses ~f the (ouncil believes that it is in the best interests of the (;ty. Regarding the nature of the Sand Hill Road traffic pr-cblems, in 1989 t"-e City inHiatsd an. or1g'in-destinaticn stJr .... e.t of traffic using Sand Mill Road in Palo Alto. The surv~y results indicat~d that significant amounts of Sand ~il1 Road traffic are not com?ng from or destined to Stanford lands. fmprovement of triffic flow in the Sand Hill corridor will have considerable general p~blic benefit as well as benefit fer Stanford lands. Staff has made an initial examination of the Stanford proposal. as well as a preliminary estimate of the project's relative financial benefit, botn to Stanford and to the City. This preliminary analYSis is bzsed on a number of assumptions, all of wh'ich can and will be challenged and refined if :staff pursues further negotiations wah Stanford. For the financial v~Tue of the Shopping Center expansion to Stanfor-d, those ass1jmptions include iI: 535.9 million estimated canstrtlctior. cost f.ar the new retail space and parking garage (spread over 3 years); 4 percent annual increases for both construction costs and rental income; and additiona1 rental income beginning in 1997 and readl1r,g full rease-up of tne entire 14Cl,OOO square-foot expansion in 1999. Regarding the financial value of the Shopping Center expansion to the City, City staff ~ave analj'zed projected sales. tax and other revenLies nkely to come to the Cliy, as well as the value of the addit~onal 140,000 square feet of retail area to tne University. The sales tax projections for the 140,000 square feet of are1!.. are based on current sal es per square foot of Mr>-major rlepartment store uses at the Center and a four percent annual growth rite in sales. While there is some assumed benefit for current Center tenants incllJded itl the o\lerall revenue projections, staff has discounted Stanford's original estimates to reflect both the ~ncertainty of these ·spillover" sales as well as the fact that some of the additional revenues may come at the expense of other Palo Alto shopping districts. Staff believes that these are reasonably conservative sa1es forecast assu~ptior.s. HI~ table Ol'i the next page shows the additional cash flow to each party, by year, from 1993 to 2010, under the assumptions list~d above. Stanford ex~ends mo~~e than $40 mill ion 111 1994-95~ and begins to rea.p the fun benefit of the expansion in 1999 when mare than 57 million of additional rellenue is availab1ej ttl1s amount gro'Ws to more than S!l rrdl1ion annually by 2010. For the City, there are no out-of-pocket costs for the Shopping Center expansion, and additional sales tax revenue beglns to flow in 1997. increasir!g to nearly $I million by)999. By 2010 the annual -addltl0nal revenue under the assumptions used her~ is nearly SI.S million per year. Based on these estimat~d cish flows, staff has also conducted net present lIalue analysis. Using reasonable ran9~s of possible dis~ount rates for Stanford and for the City, which take into account relative risk and alternative investment scenarios, staff estimates that the n€t present value of the Shopping (enter expansion CoUld range from S4.5 to SIO million for CMR;S40;92 12/3/92 Page 7 \ .... TARt!: 1 PROJECTIO ~""UAL CASH FLOW PRQk SHoPPING CENTRR BXPANSION, 1993 THROOOH 2010 (SOOO) To Uan.ford. llU llH 1ttt llU un .1lll lltt ~ Ine~emental Revenue (trom add.i.tion.l rantl!J) 2,384 4,960 7,277 7,568 0 Inc~ementAl ExpanI!J89 (tor construction) ---.11 1..J9. li...ill li...'12l! Nat Cash Flow ,0) (7,762) (16,144) (16,790 1 2,384 4,960 7,277 7,560 = = l'l'l1 L<l.!lJ l!!l!l nil! :ll1l1I 1l!l!! 1~ 1lW! 7,870 8,185 0,513 B,85_1 9,201 9,576 9,959 10,357 10.171 11,200 I'" -----7,B70 8,185 B,513 6,8<;.3 9,207 9,576 9,959 10,357 10,771 11,~OO ~A1to un lU! llU = Net Caah Fl~w tram Incremental. ROvltnue J2't .3. 95. 1,003 0 l'llll l'l9~ l'l'l1 1l!llt l!!l!l 1l!l!! :ll1l1I 1Ml = lliq , 1,042 1.083 1,125 1,169 1,215 1.262 1,311 1,363 1,416 1,471 . :'. 't't~·(\· " , ~:.;." ,", . ,;. " " , . ' , o Stanford. and from 54.5 to $5.S million for the City_ However, the~e net present v3.1ues are computed on c;d,sh f10 .. 5o cnlJ through 2010; if the table were ~xtended further into the future l the net present values could be significantlY different, dep~nd;ng on each party's assumed discount rate. The municipal re~enue forecast assumes that the new floor area will be l~ased over several years wi th f~' 1 occupancy by 1999. Aga~l'I, most revenue carnes fiom sales ta~, and saTes per square foot are based on current saTes activity in the Center escalated bJ four percent pSI'" year. The forecast assu~~s that there wi1l be no change in the current State saTes tax allocation formula. under which sal~s tax is returned to the Cfty .here the sa1e occurs. There has been consfderable discussior in the last several years of the State modifying the allocation formula to distribute some share of the ~ales tax all a per capita basis. If an allocation change occurred. the City might receive little, if any, of the increased sales ta~ revenue. At this point in time, staff's conclusions regarding financia1 participation in t~e Sand Hill Road project are: Based on the potential value of addHior:al sales tax (assuming that the State continues to distribute sales tax on the basis of point of sale and not a per capita or other formula}, City financial participation would be appropri.te. Because of the potential for State modification of the sal€s tax distrihution process and the value of the Centerls e~pansion to Stanford, any City participation should be tied to increased sales tax received by the City. Stanford's propo,.' that the City pay S2,lSO,O~O should not b. accept,d it the present tlme. Any City financial participati~~ should be the subject ~f future negotiations. CONCLUSION ~ND NEXl STEPS Staff continues to faver addr~ssing Sand Hi11 corridor traffic problems in part by havir~g Sand Hlll Road extended from ArbontulT! Road to El eamira RCll. 1his direct connection would serve the ~ubl ic and the Shopping c.er.ter better than tne current indirect connection using the (1 Camino Real entrance and parking lot of the Center. Past analysis indjcates that extension of the Road is unlike1y to be desirabl~, without addreSSing other t~'affic problems along and near Sand Hi)) Road. These inc1ude providing additi.,na1 traffic capacity it the Pasteur, Oak. Creek East and Oak Creek West intersections, as we11 as widening the bridge and the section of Sand Hi11 from the Creek to the Santa Cruz intErsection. The ]984 Sand Hill Road extension project resu1ted in a mitigation of adding a sec~nd we~tbound l~ne from Pasteur to Santa Cruz. Subsequent traffic analysis in a Santa Clara County EIR raised the desirabiTitj of a second eastbound lane. Thus, staff concludes that the current proposa1 for a fo~r-lane Sand Hill Read from Santa Cruz Avenue to f1 Camine Real i5 the most logical starting point for a 1993 Sand Hi11 Road Extension project. CMR:540:92 $-'" At T P'$ 12/3/92 Page 9 ' . " i 1 ." o Ian additional public benefit of upgrading the traffic conditiora if'1. the Sand Hill c~rridor would be the vaTup. of these improvements to City emergenc~ respuns~ staff. The functioning of Police and espec~a11y fire and Paramedrc serv;tes could b~ su~stantially improved. 1n th! past years, tne City ~iS become increasingly aw~re of the impact of municipal revenues failing to keep up with expenditure trends. Pr~tp.cting !nd enhancing municipal revenue sources is a valid City concern. The closing of Arboretum Road and expansion of the Shopping Center offer an opportunity to both address the need for the Shopping Center to remain ,ompetiti~e and protect and enhance a key !l'Iunicipai revenue source. Clearly the extension and widening of Sand Hill Road as proposed bJ Stanford offers c~nsiderab1e benefit to Stanford lands. However, addressing the traffic problems in the Sand Hill cOHidor would al so be of benefit to members of the general public: wh{l tr.l.llvel tf'lis corridor without IH!nefiting Stanford' linds. Gi~en the potential vaTue t~ the City and the general public of the Sand HilT Extension/ShDppin9 Center ExpansiDn project, a strong case can be made for the appropr;iteness of (ity financial participation in the public road portion of this p~oject~ The specific level of financial partic~patjon would nefd to be caref~lly negotiated w1t~ Stanford. Further. any City financial participation should be directly tied to the futur2 receipt of additional sales ta~ and other revenues from the floor area added to the Shopping Center. In 5~arYt staff's initial reattions to Stanford's prop~sal is that it could provide an opportunity to both rationalize the current roadway netwcrk and benefit municipal re~enues through increased sales ta~ receipts. Stanford's proposal is a put-l :c-private partnership opportunlt,) that sholild be pursued. Stiff proposes that the (1ty respond to the propos~d project and request for City financial participation by 'aving City staff do four things: 1. Pr~ceed with the processing of the propos~d project, including distributio~ in January of the Request for ?roposals to do the EIR; 2. At Stinford's request~ te~inate the existing Sand Hill Corridor Study Agreement between Stanford and Palo A1to; 3. Review and analyze the current proposal as a potenUal pubHc/pri",ate partnership; and 4. Pursue further negotiations with Sta01fClrd s.ta~f" regarding tne appropriate level of City financial participal1on. In addition, staff would work closely with City of Menlo Park staff on the UP, preparation procezs. Staff intends to proceed with these actions unless, fDilowing the Study SeSSion, members of the Co~ncil agendize these matters and Council directs CMR:540:92 P'~1Idy ,crrr 12/3/92 Page iO staff to pursue oth<!f actions. The c{lntract for preparation (l.f the ElR should be finalized by April 1993. Negotiations with Stanford regarding City financial part;cipat~on may tak! longer, and staff would not intend to link resolution of t~is issue with beg1nning work on the EiR. Respectfully submitted, _ ;f;~xuL yf. Jd~, ,-----A, ~, " Y<V KENNETH R. SCHREIBER )' ~. HARR1SON-- Cirector of Planning and Oirectcr of Finance Community Environment J~~~ [~~~~;~~~;-M.n.g.r cc: Sand Hill Corridor Milling list Attachment: Project Application lett.r CH~:540:92 12/3/92 p'~\ftud¥,=-Page lJ ..... -.. ".'--.- \ ~ I I ... , , ?,":', ," ~-:~ ." ;", / . '.' ,- STANFORD UNIVERSITY Cry of Palo Alto 250 East Hamilton Avenue Palo Alto, CA 9430] Ladies/Gentlemen: October 19, 1992 Endosed ple3.S{". flr:d Stanford University's application for an emrironmenlat im?JCl assessment and all nece?Sary City appr0vais for a project consisting of (i) the widening of Sand Hill Road to four lanes fmm Santa Cruz Avenue and e.xtt::nsion. of Sand Hill Road through to El Camino, (1i) abandonment of the Ci1.fS roadway easement for and demoJi:ion of the portion of Arboretum R-oad !,xared between Sand HLJ1 Road and Quar.ry Road (with reter.tion of an utilfty corridor And easement in the Arboretum Road alignmenl). (iii) construction of a private road running bet\veen Sand Hill Road and Quarry Road behind the Saks Fifth Avenue and Nordstrom stores, and (iv) tl1e addition to the Sti:!nford Shopping Centercf approximately 140,000 square feet of retaii space (40,000 square feel allowable under current Cil)' code requirements plus an additional 100,00 sqa..:are feel) joining the main. body of the shopping cemer and the NordstIom·Sa'k.:i sire acrcs.s the former Arboretum Road and the construction of additional deck parking providing nel additional park.ing of approximately 700 spaces. The project proposed by Stanford contemplates an agre~menl betv.'een the: Ci[}' and Stanford pursuant to whi~h Stanford WOL.;Jd c'es:gn and constflJct the project .and Ihe City would abandon the roadway easement for Arboretum Ro<!d belv.'een Sand Hill Road and Qll?ff)' Road and contribute $2.15 million towards the COSlS of the Sand Hill Road extension and widening improvements from Oak Creek \Vest to El Camino. Construction of the PiJnion of the project withtn the boundaries of Menlo Par;; would be subject to the is,~uance by Menlo Park of all necessary permits ar.d approvals. Sianford will mB.ke the appropriate applications 10 the Cit)' of Menlo Park after completion of the EIR process and approval of the project by the (i~ uf Palo Alto. Sianford inlenas to begin djs.cu~sions with the City of .".1en!o P2r~ in 1.he near future regarding the approval"frocess and possible cost aliot'ations • I Cily of Palo Alto OClOb<r 19, 1992 Page 2 Stanfonfs application tndudes Ihe following matcrlz.ls.: 1. City of Pale ArlO AppticatiQn form o 2. Project Information including a d tscriptiOI1 of the p!'"oject 3!'1d preli01inary estimates of [he co:;ts. of the project and effect of the shopping center expansion on City revenues. .3. Sand Hill Road and Nordslrom Drive Improvement Plans, including ~he follmving: Sheet 1 -Titie Sheet Sheets 2 -7 -S,od Hill Road Sheet 8· Nordstrom Drive ~. Environmental Assessment Wcrksheets Please let us know if you: bave any questions or require any addilionJ.l information. Very truly yours, ?-f-2~' __ Wliliam T. Phillips Execuii\'e Director of Rea Estate Stanford Management Company [{ 1JL{('l~'_ R Michael Kul1 Z Civil Engineering Manager Facilit;es Department 2 1 , PROJECT INFORM}\TION PROJECT DESCRIPTION The proposed project comisrs of the fol1owing: 1. Exlension of Sand HiU Road (fou. lanes) [rom the current inrerse.:tior] of Sand Hili and Arboretum through to EI Cam ina 2 Construction of -i private two lane road with t.Jrn pockets behind the Nordstrom and Saks Fifth Avenue store:; 3. Abandonment of the City's roadway ea:;.emenl for Arboretum Road between Sand Hill Road and Quarry Road and demoUriol"J of that panicn of Arboretum Road; an utility corridor and ea5ement to be retained by the City in the Arboretum Road alignment 4. Widening of Sand Hill Road {addmg two lanes) from Oak Creek West to the former Arborerum inte(5e{;tion, il11d, subject to issuance of nea:5s.:u)' penni!s and approvals by Menlo Park, from Oak Creek West {O Santa Cruz. Avenue 5. Expansion oCthe Stanford Shopping Center by adding up to 140,000 5qL:are feet of additional relai! space jOlnL'g the main body of the shopping center to the Nordstrom·Saks site across Lhe former Arboretum Road and cor:strucling three new parking slructures and an addirionaJ de.c\:: on the existing parking st.ruchJre to provide approximately 700 net additlonal parking spaces Attachment A illustrates the k"'Calion and alignment of the projecL PROJECT COSTS Costs of (he project as proposed, excluding costs of expansion of the snopping center ar.d construction of additional parking structures in the cen:er, are estima1t!d at approximately S9.1 million doBars in 1992 dollar.s. Attachments A and B snow the estimated costs of the project by it.s components. EFFECT ON CITY REVE.'IUF.5 Attachment C is a cash flow anali'~is of the estimated effects of the incrementai 100,000 square foot shopping center expansion on City revenues. ',,'. ',<, •• .' .. ," - 1 MUNICIPAL CODE 1EXT CHk'\fGE CtH'TLntly under Section 18.43.050 Df the Pato Nro Municipal Code, the shoppL'"!g center is subject to a limit of 65 ,()(x) additional square feel of space, ofwhlCh appro:timareJy 40,CKXl square feel remains available for expansion. The contempiaJc(! expa.'1.Sion requires a further 100,000 SQ'uaI'e fw. To accommodate the pmject the provisions of Section 18.43.050 would !leed tc, be revised to pro'l,::de th<:t!, in additi{Jn to t~e 65,(l(X) additional square feet currently penni ned, the shoppiJlg center may add a further 100,000 square feet if the Sand HUl Road widening and e:.densioQ from Oak Creek West to EJ Camino is undert.aXen prior to or concurrently with such expan~ion. DEVELOPMENT AGREEMENT Under t~ tenns and conditions of a development agreement between the City of Palo Alto and Stanford, Stanford wauld initiate> design.and construct the project and the . Cily would conLnoute $2.15 million to the costs of the extension atld widenrng of Sand Hili Road within ~he city limits of Palo Alto and abandon its roadway easement over {he portion of Arboretum affected by the project. The deyelopment agreem~nt would specify thai constr1Jcticn of the portion of {he Sand Hill Road project within Menlo Park city limits would be subject to the issuance by Merifo Park cf all nC'.cessary permits and approvals. ----- ~ .... ;~':_~, _c ," -- 'I ,:.'. SHOPPING CENTERiSAND HILL ROAD PROJECT -;--.. -. ---.. Sud hwl fmplOY1lm.fnt!l, ~1=Id..toOak. CrMk w..,· $2 miJ'cn $and HIlI ~ ... Ntl«t'f.uM..." ~ + HOfd'~ Rd.~ Po-I millen ... "~E1A IlId!:o.~II" ial'*" TOTAL COST~ sa,,? MrlUOH 5 ATfACH~t:NT E. fSANiiHiLtROAD CORRiDOR PROJECT J CONSTRUCTION C()ST SUMMARY STANFORD UNIVERSITY 'SEGMENT DESCRIPTION "- BRIA.N KANGAS fO"_K 981 RIODER P.'~RK ~iVE SUiTE 100 SAN JOSE, CA 9512" 10Ji2f92 ------ESTIMATED NO. NEW INTERSECTION Or SANb-HILLRO"D Aim ___ _"" ___ L--,-PROJECT COST I 5325,00000 SANTA CRUZ AVENuE II SANTA CRUZ AVENUE TO SAN FRANCISQUITO BRIDGE 5875,000"00 EXISTING ROAD WIT" TWO LANE WIDENING INCLUDING FRONTAGE ROAD WITH SOUNDWA LL -0-SAN FRANCISQUlTO BRIDGE 51,125,000"00 EXJSTING BRJDGE WITH T\'VO lP.NE WIDENiNG 1--0-N SAN FRANCISQUITO BRIDGE TO PASTEUR DRIV E i----" EXISTING ROAD WITH TWO LANE WIDENING V PASTEUR DRIVE TO ARBORETUM ROAD >-"" EXISTING ROAD WITH TWO LANE WIDENING VI ARBORETUM ROAD TO EL CAMINO RE.o.L NEW FOUR LANE ROAD VII NEW INTERSECTION OF S.,wD HILL ROAD AND EL CAMINO REAL VIII NORDSTROM ROAD CONSTRUCTIO'. - A~BORETUM ROAD DEMOLITION --I)( 1-"---FROM SAND HILL ROAD TO QUARRY ROAD GOLF COURSE MODIFICATIONS -----X -" EIR AND CON"TINGENCIES ----------- L-...... ~ -- NOTES, THIS ESTIMATE IS BASED ON 1992 PHICES -~ $1,070,000 00 Sl,785.ooo.oo 5325,00000 S845,OOO"~ 5160,000.00 SQSO,OOOOO "---=-'--~ S1,000,000 00 ----0- $9,110,000"00 .. ; -' .'~. ",1< ~. "\SSUMf'T10NS: CPI 1991 Salll$l (SOOO'I) AndlOU I, 1. .~d ~ M.\\.n6 Olhtt )lnC!lOn F.~ .... nli"n SJ"'c" ,squa,. Foot.!" {"u"ilv~,i in yllllr 3) 4.00~ c.,1) Plnw "naJ)'.i. of f'nfcnli.1 sse E~JlIII1Sion 11Wl·2010 105,700 Sal"ij ror (11\., ftl1Chu, nt M~"IM.d ie} inf.huo IS," over) ylllll'R as 8 r.~ull o(lho Uplln,inll ,nd .1I!e~ (fir lb. ot/1.,. I"'u and,oTA _re IULlrn~ 10 inert ... ", IOj(. ",,(at ) , __ " IIItWlIi of Ill_ "paillion. 242,t'OO Sill" U. ulumod III loc,ed ... 211 .... ruull ord,,,, up.II.ion. 140,000 6),000 5.1.,111'11 pt.lsed in over II] )"Oftr J"'riod (1Il,ll1.113) E~f'lIUIOII (140,000 mq. {\.} if COI"I'I~od ~ Iq'r'/ Le ... e III' i. ll'"compli&t.a:lllnd uil'-I &llIhiliu in 1999 SlIIe. "-I .. """m~ 11> be fin! ill 1992 lind "'lI$n inc"",I" _I crl. 19'J7 199A 1999 1\100 }OOI '2002' 2'00:1 2004 2005 ---"---, THIS TABLE R~PLACES It. SnHLl\.R TABLE II'ICL"UEO WITH THE ORlGlNAL APPLICkTION (J 200' 2001 ?OO~ 1009 1010 rroju1ecI AnnUlI S~rf4 Artmr i!ll'~lI~jun ,,,,,chur' I, '1 1M ~' 1""-,344 ''''>,Tn 1511,12'4 164,«'" 17[,0:27 177,6611 184,\1113 192,)112 200,071 2Q8.u~1) 1U',404 2:H-,06O 134,0"-'1 243,415 M.lt ~nd Odlet AncJunl S"lum.,r,,, SI'II~~ {.I.hili~_~,;t HI yUIT ]) TollIl S81.,. t'rIlJC<"fed AnnuAl Si\Ie. flcforr. E~l'mIUlon Aw::!"",. '" '1 ami 3 M~!I ~rld Otlr.,,. An~lIj')r~ Tr".! SRtGI 301,)1 I )13.364 ;\15-,\\9& 338.~)4 352,"'12: 366,591 ]&1,255 396,505 412,1(,"1 4111,1160 446,014 "6],855 4!l-1,409 5('11,706 25,294 52,612 ~"!,(ln 115,358 "B,I12 ~2,)2] 96,016 99,8~6 10:1,1151 1(}8,o05 112,32~ 1(6,&\& nl,"'?\ ,·16,]5Q 460,9~I:1I;!~(~h-,(1'}1 S~8,-141 ()1"l,'l'J1 6]6,78Z 662,i~ 688,Z~~9J 74~!~174,,~~_~;'!.,73J FlJ-7).!'~ 1171,48~_ 1211,,600 295,40) .~24,~ 1)],74-4 !39,094 144,658 /50,444 156,46] 16:2,720 169,229 1',:;,998 18],0)8 190,)60 197,9'''' If)S,S.?1 7-14,119 307,219 J('},~I!. JJ1,?t9 'YoS,S!\"! ]5'),0\0) 37),179 11111,1JI 404,2~u 420,451 4)7,269 454,7(,(l 41~,950 491.8(08 44(i,9()4 ~B_,~! 476,946 4%,OU~ ,HS,IIM S}~,~--551,9W 580,Tli WjX~9 ~~~_~:B4 i~B,a4'J~70"{,997 Proj""M In£I~""'I" III s..1~ .. f'NII Ellpaflmmn Anchnrl 1,2' Ind J 5,74J Mnllllpd Olher And"'ra 5,908 11,981 6,144 19,0.'0 (',JI)O 19,79{ 20,~&] 6,646 6,912 Il,40t. "!,11111 12,262 1,476 'n,ID ., ;(1S 2".079 ~,OS6 25,042 &,409 26,044 1,145 27,O!6 9,095 28,169 9,459 " "9,291 ) 9,1]7 tllp .... r,i...'1\ Sl'~c .. ("ab.JiUld In y"",r J) 2.5,194 Sl,611 "');,0'1.5 85,)58 R8,rT2 9~,:l:'>J 96,016 99,1156 IOJ,851 106,OOS 1!2,325 116,11)6 121,~91 126,3~o Tnfal InUlIn,,,,,,!_) SII.,.. 11lC!'",m"nllll CallI! Flow. IQ Pdo ",Itu s.)~, Ttl (1% Df S~ltl) pf<lpc;rty Tu.,K (S I .09lS100 \nutll~i~£ @ 2~iJ'r, 11'1. It' elly) UliJity Uler Tn (5'" ,,[ UliJihu] Tnlallrlcrem"'l\l.r (IIlh Fiowl ~,94~ 10,13-;·ItJi,~7~t(--lli~166l-lQ,9-\-'-lms4~iot~u~I4TA56j47,iT4i5j~99--t{9~IiTJ(J,:'u '" 107 1,01'5-t,11I 1,161 1,209 t,::m J,'O~ 1,360 1,41') 1,471 1,530 1,591 1,655 " 29 29 3. 3() 1I )2 " 3J " )4 " " )6 , • , • 9 9 9 I. JO II II " '2 11 405 ", i, J 11 1,156 1,101\:149 1,2~9 1,)50 1,40] I ,45~ 1,516 1,576 I 1))9 1,704 ="-=---= = " ~f:"d'I:IlP~"""t;-~ti.L~..;..: ... ~'-" ; .. , '-~ ,