HomeMy WebLinkAbout0209.094March 31, 1994
HONORABLB CITY COUNCIL
Palo Alto, California
Attention: policy and Services Committee
'>
STANFORD RESBARCH PARK - -MAJOR POLICY ISSUBS
MSOCIIITED WIT/! ST~gUll\RK_.sj·l!AIll!UC.l'!""l!
Members of the C~uncil:
This report transmits a summary of a Stanford Research Park
Strategic Plan prepared by the Stanford Management Company. The
staff report elaborates on policy issu.es in the areas of
competitiveness, intensification and/or expansion of the Park,
housing. and transportation. It is recommended that the policy
and services Committee discuss the Strategic Plan and issues of
interest and retain this item in committee. Future Committee
consideration could focus on development of policy recorrrnenda
tiona for the Research Pat'K. policy recommendations could relate
to the Bconomic Resources Plan and the new Comprehensive Plan,
Background
In September 1991, City staff issued the Stanford Research Park
Study CBxecutive Surrmary a'ttached). Blem.ents of the Study have
been discussed QY the policy and Services Committee on October 29
and December 3, 1991, and February 4 and March 17, 1992.
Corcmittee discussion haf>'focused on Park-related issues that:' are
primarily under the City'S budgetary or procedural control, As
noted in the Study. Stanford staff had been working on a Research
Pat'k Plan,' and numerous Park issues, especially related to longer
term us~ of land and provision of amenities. are·most logically
discussed within the context of the Stanford planning process.
During the past three years. Stanford Nanagement Company's
Re~earch Park planning process evolved from a broad based Plan to
a Strategic Plan focused on the long-term value Ci.nd
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competitiveness Of the Park. Stanford has sWbmitted the attached
summary of their Strategic Plan.
The purposes of the April 5 Policy and Selvices Corrrt1ittee meeting
are to allow Stanford to make a presentation on their Park
planning process, receive initial reactions from M£mbers of the
Comnittee, and identify the next steps in the City/s
consideration of Research Park-related issues. No formal
racoomendationa by the COTmlittee are r-ecorrrnended, and the
Research Park Stud:y' should be retained in Coninittee for further
discussion and development of policy recommendations. The
purpose ot this staff report is to identify major policy .issues
that should be addreSHed in discussion of the near-,
intarmediate-and longer-tern future of the R6~,earch Parlc
PoUSy Issues
1, ~titiyen~ -How much emphasis should the City give,
especially in the land use planning process, to maintaining
the competitive natuX'e of the Research Park?
2,
The first ~1ajol' Finding identified on page 3 of the Resea:t'ch
Park Study is that ulncreasing competition regionally,
nationally, and internationally makes retention and
recruitment Of ~usineB9 more difficult." The Study's land
use section ident.ifies (pages 32-36) a series of issues and
potential actions, most of which aloe related to addressing
the competitiveness of the Park. The attached surrrnary of
the Strategi.c PItm identifies, on pi'l.ge 41 a numbet' of
actions designed to enhance the Park/s competitive position.
Maintaining the stature of the Park should be an important
City policy objective. Initial visions for the llew
Comprehensive Plan, developed by the ComprehensiYe Plan
Advisory Committee CCPAC) and endorsed by the City Council,
include "Support Stauford Research Park in maintaining its
world-claSH competitive position as a business and
profeSSional center. PI Maintaining the Park's stature will
of necessity require a cooperative planning ~f'fort by the
City, the Univp.rsity and Park tenants, and re'c09'hition by the
City th3t Research Park issues deserve significant
attention,
Intensificat.i.Q11 and/Or BK£Wl§.iOn of the Park -To what
extent is the City willing to entertain intensification of
uses in and/or expansion of the Research Park?
The Strategic Plan summary notes on 'page 11 lilt is essential
to expand the Park to reillain competitive. II The Strategy
(page 4) includes 'IAugment expansion capacity of the Park"
and identifies a variety of desired office-related oervices.
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One, logical area for intensification is near the Page Mill
Roact/Hl Camino Real intexsection. Staff believes that mo~e
intensive development. in the page Mill/B! Camino area,
including opportunities for professional office, hotel and
possibly residential uses, should be 9iven serious
consideration.
The most, and probably only, logical Park. expansion al"ea is
the: land located southwest of the Page Mill Road/Foothill
Expressway intersection, including unincorporated lands
south of Page Mill Road. Any conoideration of development
in this area raises a series of significant open space
concerns:. Land 1n the City and unincok.-porated land is
deSignated Open Space ... Control led D~velopment in the
Comp~ehonsivo Plan. All of the vndeveloped land located
within the City is covered by open space easements. Coyote
Hill ?nd the land on the northwest tlanks of tlle Hill as far
west a8 the City limit. which is also Barron Creek, baa
approxirrately eight more years of development restrictions
under the easerr.ent. The parcel on Coyote Hill Road, west of
the ,Xerox site ao far as the Creek/City limit, has an open
apace easement that expires in 2024, While Bome level of
development could eventually be accorrrnodated in the open
Space designated area, it would be a significant departure
from well established City planning policies. Maintaining
key open space values and protecting Coyote Hill from
develoJXMnt would be critical. Any development of the area
bounded by Page Hill Road, Deer Cr.eek Road. Coyote Hill Road
and Barron Creek. ""o\lld need to be compatible with
topographical limi.tations ?tnd be vety sensitively designed.
HQusing ~ What aloe the appropriate housing mitigations for
City decisions involving the 109$ of the currently
designated housing sits and/or incx-eased development and
employment potential within the Park?
TWo related housing issues need to be considered. First,
should a change to the one hOU8i~g designated site in the
Park (the RN-40 area at page MUl and III camino Real) be
entertained? Second, what is the linkage between either the
1088 ot the eXi3ting housing site and/or intensification/
expansiop of ~he Park and tho provision of housing?
Regarding the existing housing site, ataff beli~ves that
l.'eccinsideration of the housing land use designation is
appropriate. Monitoring wells have identified high levels
of contamination in the underground wat.er located about 20
to 25 feet below the Bur.face, This contamination is
spreading primarily from the adjacent 620·640 page Mill Road
Superfund site. While a recent federal/state risk analysis
conchldes that housing could be builto, staff has concluded
that housing is not the most appropriate land use for this
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critical entryway to the ReSel.lrch park. Howevet·, this
conclusion does not mean that housing C81lll0t be built in the
Park. Some of the areas south of Page Mill Road near Bl
C~mino Real have lower levels of underground 'contamination.
Housing, eapecially in mixed use structures with
professional offices~ might be quite appro,p'l."iate" current
City policies on jobs and housing, along with t"egional
concerns, mean that intensittcbtion of Park activities,
combined with tlle 10s8 of a significant housing site, should
be accompanied by housing mitigation. If at all possible,
the mitigation shou~d bo accomplished through the provision
of new housing units rather than by sole reliance on fees
paid to the City.
Transpol"tM.iQn ~ Wh~t cOll\billtltion of traffic improvements,
(e.g., shuttle bUB services, improved transit, incl."eased
traffic carryilig ca.pacity) would be acceptable/desirable
with either the existing Research Park or a larger and/or
more intensively uued Research Pat:k7
.~y consideration of the long·teum future of the Park need~
to incorporate transportation issuE's and opportunitiea. The
Research Park Study identU-ies shuttle bus service,
sidewalks and proviSion of corrrnercial sek:vices in pOl"tions
of the Park, at} impt-ovements that would lesoen use of
automobiles. Any significa--:\t intensification and/or
expa!1sion of Pal"k activities will have to address traf.fic
problems, especially along Page Mill Road, Foothill
Expressway, and Arastradero Road, Of thesa xouteB~ page
Mill Road is likoly to present the most problema and,
perhaps, opportunities. CUrrent traffic conditions at key
Page Mill Road intel'sections from B1 Camino Real to Deer
Creek Road (and at. Oregon Bxpressway and Hiddlefield)' are
poor or worse. While federal funding ha$ been secured for
improving the Page ~lill Rcad/Poothl11 ExpresS.,ay illter
Bection, finding the financial resources necessary to .
significantly improve other traffic capacity problems on
Page Mill Road <and especially the intersection with 81
Camino Real) may be more li.kely under a more inten8e level
of development than under, the statUB qvo or a scenario
having a marginat increase in development intensity. In the
long ten1l, the extension of light rail to Mountain View (J\8.y
of~er the opportunity to pursue extension to Palo Alto,
including the Research Park and the University" Staff
believes that Park planning should start by identifying what
al~ernative mixes of land uses are potentially desirable and
then proceed t.o addressing the transportation issues and
problems associated with that planning alternative.
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Conclusion
·This etaff report has identified a series of important policy
issues that should be referred to in disco,ssions of the future of
the Research Park. Undoubtedly, other issues will emergo as tho
Univer.sity, City, Park tenants and the public grapple with
defining the future of the Park. The policy and Services
committee should explore these issues with the intent of
identifying where more information is needed from University or
City staff and identifying topics that could be the subject of
future commdttee discussion. The item should be retained in
Cortmittee a.nd be placed on a future C<mnittee agenda for fUrther
review and consideration. It is anticipated that the Content and
results, of CoTt1T1ittee and Council review will' eventually be
integrated with the Bconomic Resources Plan and with the
Council's identification of policies and programs for the new
Comprehensive Plan. To most effectively integrate the prcxh)ct of
Committee discussion with tne Plan update, any Corrrnittee actions
should be available by September, 1994. Staff wO\lld cHlticipate
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KENNETH R. SCHRBIBER R FL~~ING
Director of Pl~IL~ing and ity Manager
Community Bnvironment
Attachments: Stanford Research Park Strategic Plan summary
1991 Stanford Researcll Park Study Stmmary
CC: Architectural Review Board
Planning Commission
Comprehensive Plan Advisory Committee
Stanford University {Andy Cae, David Neuman)
·Stanford Management Company (CUrtis Feeny, Bill Phillips,
Diane Healey)
Stanford .Research Park Tenants and Leaseholders
Barron Park Association
College Terrace Residents Association
Chamber of Commerce
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~rd Res •• lliLb.!KSlralegic.!1m
.strAfegic Miu.kUL
The slrategic mission for Ihe Sianford Research Park is 10 oplimize ilS IDng leml value
8lld compelitivelle!, for Ihe benefil of the University's endowment while, to the exlenl
economicaUy viable, promoltng uses which are s)'Dergistic wilh Ihe programmatic goals of
the University. .
Hjstmy and Slana Qr the ?ark
The Sianford Research Park covers 704 2<res bounded by EI Camino, Deer Creek Road,
Naslradero Road and CaUforni. Avenue. Tn addilion, there are forty acres located
south of Foothill Expremvay near the center of the Park which are subject 10 open space
conlraclS cancelable in 10 10 20 years. Lastly, an addilional265 acres of unincorpol3ted
laud border the southwest edge of Ihe developed area.
The Park grew to its current size o .... ·er a development period of over 30 years, beginnlng
with the firsl l,asehold (10 Varian in 1951) al EI Camino and Hansen Way .nd e>'Panded
:south and west. This gro\lnh Deelured in resporue 10 demand by companies as well as a
desire by the University to create ~come and synergy v..itb Uni\lersity research and
development, Today, the Park includes 9,6 DUilion square feel of high technology and
commercial ten3JllS employing some 23,000 residents.
Almost all of the 20ned area of the Park was iea!ed o\'er tile years on long term prepaid
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ground leases \I;th iniliailerms of S1 10 99 years (since t~e 1960's .11 initial terms have
been no longer than Sl years). Today, only three sitts camp,rising 19.4 .acres are not
. giOundleased to Ihird pacties. There .re 86 pre'paid land leaseholds which expire over
the next 20 10 {10 years. The current mix of t.enants on a square footage basis 1S:
Research/Office
Manu(acturing
Professional Office
75%
15%
10%
It is essential to expand the Park to remain competitive. The Park's success is tied to its
ability to keep and .lIract COlllp.nies involved in culling edge indu",ies who ar<. willing
10 pay preillium renlS for a proximale loc.lion to Sianford. These have typicaUy been
growlh companies ",iio bring vilility 10 the Park bUI also depend on Ihe flexibility to
expand. Under existing zoning, tbe Park currently has approximately 1.3 million square
feel of addilion.l FAR available for developmenl in the built·out area, predominanlly on
land around leased to third parties. In praclice, the actu,1 developable area will vary
based 011 topographic, use, Jegal, and political circuUlSlances on a sile by site basiS".
"
Dec.embcr 13, 199)
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Stanford', approach to ground lease arrangemenlS ha, evolved over time as circumstances
h.ve cbanged, The key coruiderations in determining groundleasing strategy are;
a, Use clause (de.fining the t)'P. of aClivity allowed on tbe site)
b~ Etonomks of renewaJ, exteruion and Dew leases
¢, Environmental II.IUes and guidelines
While opportunities {or Stanford to recapture;1S land value are somewhat limited by
virtue of the (act tllat many leas .. do not expire {or two or three decades, the University
Is now In It unique position to deliberately enhance ilS IODg term economic intereslS in
the Park lor a number of reasoru:
•. POI1Y percent of the Park leases have 1m than 30 year, remaining on their lease
term, and coruequenlly Ihese lessees h3\'e limited flexibility to expand, sublease or
remodel,
b. St,,'eraJ s.ites are in a stale of transitioll r ... $ the needs of long term occupants have
c\'oh'ed.
c, Re..sL.riclt\'C use c1ause.s are creating challenges [or some tenants.
d. There i! strong demand lor 'pace in Ihe Park from new tenants in emerging
induurits (biotechnolon, so!rw-arc, material sciences and envlronmenl~
management) who are <omp,tibl. with major R&D efforlS at Stanford.
Stanford Research Park bas a number of strengths to build upon and several weaknesses
whfch need to b. addressed,
Loeuion
Rep.",lo.
World '1>$' R&D In hlgb tecb and m.oici.e
C1mP'J1,·sl)'Ie. .selling
Ploxi.rn3ty to ex«'Utive housing
Gw"aI Quality of lif.
Suoog high lecli labor pool
Acc«s to c.api'l1J
Duerobtr 13~ 1993
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Relative\yhigh rents
Peruived dift1tulty of doing bu~iness wiLh
University
CbaltenRlng regulatory en\lironment
Lack or coht.siye archit~t\lre~ si,gnagc. ideoCty
Lack of affordabl e housing
Tutti e c.onges lion
Lack of expansion space
Land Iwe COlU1U i nts
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In addition 10 \heso llIe"sllls and "',a.I:n.,ltS, lome constraints ,h.pe the opportunities and
lhrealS which face \he Par~, ll1ese include Ill. hisWlic4l.!y rigOtou, naNle of the Cily of
Palo AllOappIOya! p,ocesS, land 1<= expilao()() dalt', Sand Hill R~ad development aCIh'ily
by Stanford, general sensitivity 10 new development, infrastruc.t\Jre con$iIaln~·, economics.
capiw availabililY and environmenw failoIS,
, The viialily of the SUnfotd Research Park is ultimately .ff",W by the conlext in wllich it
openir.es: the Ib:.OllQmy 1Jld the rom~tlti\'e C'_nviro~menl. The national and Mate ecoaomln
haYo been struggling with [«<ssienaI)' pressure.!.
California is al,o fae;"g ltv.,,! 'p"'ifio chall.nges ind"ding: i) relatively high cosls 10
conduct busine5?, ii) ltringeJH regu'ahHY r.eqt!itemenLS , iHJ u~n'5ive ,",ousing and
iy) congcsti('n iuues:. Ihil hAS <luted a b\J~ifl.t .. .u ciimale wMth is not ('onducive!o new job
growth,
The good l1t\\'S is that the exr«te.d "g!ow!h induHries" for the. future (biotechnology.
sofu\'ale~ and tn\'itonmcnlal Kh~r.ccs 10 name a few) ale based on lechnological adva.mages,
an area which favors c.'Jt(orru-a iUld Slii('on Valley in pa.rticutar. 111t:re are a nurnbu of
vltWS regtuding pros-pe.:uve gr-ow~h, with most fOI«-a<;ls suggestlng moderale growth for the
next decade.
The lo!<ll Silicon Valley for-I .. ", "".k" cor,lain, .ome 122 millio" "luare feel of 'p,ee.
N'et abs.orption has bun near zero (or .he last couple )'taJ.$, and vac.ancy has Jiovc.red around
15%. There are ,ix ,ub markel< Ihal compele mOll ditwly v.;1h me Park, all of which offer
,igniHcanlly lower ""W rat .. , The relauve appeal of me'" maJkels is renccltd by the range
'of rtnuJ rales offered. Nel !enW rales in North San lolt WId the G,ut America area,
0"'''8e S.70/NNNI"luare (001, Mounlain View ",'mges SI.~O/"luare 1001 and IhePark;,
at tile lOp of Ihe market at 51.75.
The. Rtstarc.h Par\: alto (Qrnpt;es; illdiroctly y.'hh other area.s in California as weH as other
states, Many areas have C1tJ,'l(.d t(onomic development prograIns designed to lure companies
'With econ.omic inc:tntives, The Rc.~ch Pall.: is wC'U politioned 10 avert the dowmide
associated with corporale relocation to less txpen5.ive aJlemauves bec.ause of its niche as a
sophaticated R&D tncJave with links 10 the University. To .some eXlenl j this niche insu)ar.es
tlJe Park from cost driven lelocation as compMjes continue 10 believe in the long leon
ben,HIS of a Stanford loc.'Itien. The challenge going (orv...,d will be. 10 pr=rve and "urNr"
mal niche,
De«tllbu 13, 199:;
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Severn poUcies and ini,jalives should be put in piau to provide the general direction for the
Park's fuNr •. The ,,,,,,,mmended componenls ~f this strategy are as (oUows:
leasing.
• Pursu, S!anford related tenancies
• Pum, Core Iwants who inherently add value 10 the Park by way of synergy with the
UnivtUity and/or benefit 10 the CQmmunity. RcWn Illge corpor?.a.. lCn!llU who
CQntlnue 10 add value 10 the PlIk', overall reputation and appeal.
• Concentr.te marketing on companies with .ctivitJ" synergistic to the University's
R&D !olrengths s\Jch M el«.LJonLCS , biohX:h.!10!ogy, .wnWA.J:e, and en"ironmental
sciences.
$ Dlvusify Fark jncome Q'Icr time to\olo'a.ld an equal mix of pre-paid luscs:, annual
payment leases and joint venture slrUCiUres.
• Estab!..ish leasi.ng commissioil polid¢.$ in the P'lIk whkh are leOeclive of the mean.,
commission in the rnarkello demOMlt.:!te a ·u5-er friendly· approoch.
Competirlve Position
• Attract and enhance selvkcs and service [ertanls. Spedfi~ly, work towaJd bringing
z. hotel, (onreren~ center c.apabmLies, an athletk club, res.la\lraIlts iUld olher oCfke
related sezvices_ 'These would be located on the mlljor lrans:pon2.Li{)FI anenes where
pollible.
• Work on long lerm impwvemetlts to lrafflc cong<suon. Eru~anee the Tr''''porution
Demand Man.gernenl measure. in the Park by helping cooldinate Ihe Icn"'t>,
S!anford Shui~e and mass tr",si!.
• . Improve lIle archit""l\Jru continuity lI1d appearance of the Park ovu time., cash
flow is available.
• Pursue incubators. to the ex.[ent they can be subsidized by outsid.e sourcej.
Create Val""
• Augment expansion capacity of the Park,
December 13, 199)
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• Negotiale use clause changes, where appropr;'l.e.
• Over the next 5 to 10 years, iJlVW up 10 $40 million (rom tlle University endowment
to caprure land value where rerums justify such investment.
• Work with c>tisting siaff and leverage outside resourc.s to achieve these goals.
M.,Ifr.r and Be Flexible
• Monitor the Park's position and issues."d remain fle>tible to change course as the
business and University environments change and evolve. Slral.egy mult evolve as
markets and circumstances change and new information is obtained.
Economic lmptlCls
• The assumptions made with respect 10 these goals and strategies Yleld an incremental
value creation of S42 million over 'Lht next J5 years. The University inYtslment to
cr.ale lhis v.lue could be as much as $40 mimon O!Surning Stanford conlIibultS land
and invests 20 percent of lotal cost. The. IS-year <ash flow analysis shows U,al mosl
of the e::onomic benefit is It"ui\'ed after the firsl five years as a result of the time
horiv>n generally involvoo in real eslale projoclS.
Det(;llli>er 13, 1~3
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EXECUTll~£ SIIHIlARY . . ,
'Tile d.velop!Mnt of the St.nford R .... rch Park was • vlslonary endeavor th.t
used the UniverSity's assets for .c.d,mlc .nd financial beneftt. r'"-" ,assets
ware both avall.ble l.nd .nd the lntellect",l resources of graduat., j
faculty .. mbers. The commercial application of technology developet ~hln
the Park has had wld.spread ramifications and ben,flts, as .vldenced by the
proliferation of the electronics Industry and the developm.nt of Silicon
Valley.
lhe coomitment of University rescurces, • long-term perspective and
coop.ratlon of the City were all necessary, but not sufficient, Ingredients
fQ~.the Park's success. That required persona) attention and cultivation,
largely provided by Frederld Terman, who carefully reco'uHed fledgl1ng
companies to locate In the Park. The tenant mix and technology focus were
dellb,rate.
Momentum, rather than active (ult;\lation, has carried the Park through the
past 20 years. Stanford, as well as the City, has grown accustomed to the
ParK's cuntinued development, centered around key anchor tenants. The Park's
ongoing success became presupposed. Hany changes now coming to beil.r mean that
passive management and presumed success are no longer acceptable practices.
n. 1990s mark the beginning of a critic.l period for the Park in term, of its
future continued vitality and success. Same of the major influenCing factors
are:
Hany leaseholds are approaching a remaining life of 30 years or less
and decisions on lease renewals and exte~sions will have a
significant i~pact on the Park;
Environmental challenges, such is groundwater cleanup and air
QU11ity management;
Emerging State·inspired trans'partation planning and tr.tff1c
congest1on·related rules and proted~resj
Competit~on, both domestically and Internationally,
ReevalY3tion of economic uses of space and the shorten1ng functional
usef~i life of facilitiesj and
Tel ecorrrnuni cat 1 ons advancements.
The major findings of the stL"cfy are a (ambination of empirical and qualitative
deductlo~S. lhey are intended to prov1de a basis for ongOing reference and
action regarding the City/s future Park-related activities,
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STANFORD RESEARCH PARK
SITE LOCATION
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for Il'.c rN'~.oUi of thf $I."fofc! ~UU"(h ' .. r~ $tWy. the " .. I" Alto S"'J~rell"9~ ~i!l PI!Ct dHeloP't.eo'lt 61 £1 C"!!IHI~
tul l'"4f .. tt Mill R(lld ,"hr.r'\.!'d C~iI.r lC'H ~5nl and ttloe Y.et~rHl·S hi"l1/HUul iC<'l HoI~It .. 1 .dJlCt..,t tel foalh;l1
hp'Uly" 'P ... bllc "OIIl!U l~ .rtf] "fIe Il\("hrdUS ""HI-'Iln t~ "r)o: t.ourl<hrirs. 'IIllh 1~le .ren, the $> .. rk
rO<'l1l11\1 '~ro'll\oI~t,1w 1£(1 ,,(tU of hnd. 9,100.000 1Cl!"Ht ful of o1tyr.I"~l'lt ."'" l~.S~~ trIOIl10)'us. 'lithout Ihflil!
IIUI. the t,ul hu 'W''''~I~~elJ no IUtl or 1.t>d, 1.6lS,OOO IQ:U.ft lui of (!.e"tIQ~lIt ud Zl.&~ ~Io)'eu.
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Hajor Flndlnos
1.
2.
3.
Increasing competition reglon.ll~, nationally, and fntern.tlonally ".ko,
retention and recrult~nt of bu.lnes • .ore difficult,
LocatiOn deehlons continuo to bo governed by hctors such os econ",le
us. of space, proxlolty to cusl~rs, availability of workers, occupancy
cost and a~nltl.s. Tel.c~nfeatlons ad,ances In particular (f,x
machInes, audlo,vlsual and data Inlerface) are changing conv.ntlon.l
wisdom regarding location requIrements. Additionally, regulatory
disparIty belwe,n counlles and sl.tes r.gardlng .n,lron~.ntal I,sues
"Ill play. luger role. ,Addreu Is I><lr. l.porU"t for dev&loplng
companlos lha. for e,t.bllsh.d one ••
The next ten ye-oars
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upecl-ll1y be-cavse of hase t1Ail1{1 and c:o.'IIpetHlon
factors, are c.rH'fcal to the forINJl.at1on and lltpleeent.!iUo.n of a
red.v~lop.ent ~"ter phn for the Park.
Approxl~ately one·thlrd of the fark land and building .re •• is within 30
years of lease expiration. R.develop"".t of Iho Park will b •• ithtr by
design or by dof"lt. Cd • .,lt "Ill "esull If slt.s contlnu. to b.
vlew.d in I.olatlon .Ithout ,It.ntlon to potEntial porcei (.obinlng or
proylsfofl of needed special hdllt1es.. (orwersely. a designed naster
phn would provide cont~xt· for needed redelr'elop!"rtnt and enh~nce1llenl;
lease renegotiations; tenant retent10n ind recrult~nt; and ceslred
special 4.1f.-(!nitles, Including P.leet1ng and tralnin9, restllJrJlnt and child
c.rE facilities.
Opportunltlos abound for ito. City In cooperation with Stanford to toke •
proactlv. Tol. In setting the .t.go for ,.d participating In Res •• rch
Park ma.ter planning.
So~ sp~cif1c examples Ir~~
Developing & re~se plan for tre:at(l'd grOllndvater utruted froft
clf'anup situ;
Prov1ding reclai~ed ~ater delivery 1n(ra1tructurei
FacJlitating a ,qesearch Puk Transportattol) Hanagerteilt Auociation
to expand upon the efforts a1ready vnderw~y to reduce the number of
vtMc1es entering the P3rKi .
Providing an .lt~rn.t. fuel st,tlon for "SO by v.hlcle
fleets; ilnd
Investlg.tlng of the feaslblllty of Transfer of Oe,.lop ... nt Rights
(TOR) as • m.ch •• i.~ to provide d.velo~ .. nt flexibility wlthln
built-out areas whl1e ensuring c-ompenuting cormunHy benefit.
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4. A number of planning assu~ptlons Itere discovered to be erroneous or ill
found~d as a result of 10fo"",tloo g.thered for thl. Study.
Some specific example. are:
£fI:j>loyment density was confl""ed to ba 1."0 .. than previously
thought;
Expected rate of additional development and new traffiC g.n.r.tl~n
will be slower than previously proj~cted;
'. Sales tax does not follow. relall sales cycle;
Property tax as a percentage of tot.1 City property t.x r~venue has
beon st.ble rather than declining; and
ElectriCity use Is mare 1ntense and increastngly tiused by factors
nol related to additional develop.ent of n •• bUilding floor ar.,.
5. The City's financial dependence upon the Park and Its bu. In •••
<etlvitles Is greater than would It.ve been pre>u .. d (Ive ye.rs '90,
Additionally. financial ,ctlvlty Is concentrated within a se.11 group of
key anchor t~nants.
Research Park-gene,'ated revenue from taw" (property, sal .. , ulility
",ers) and utility oper.tlng lransfe" account for ,pproxl •• I.ly IS
percent of City general fund reVfnue. Even w1th the 1055 of S~ salts
offices In the 1980 •• the Park Is .lmo,t a, large a ,.1 •• ta, gene,otor
'$ the Stanford Shopping Center, ha, pr.,lded a ,table r.th,r thon
decllnlro share of property taxes. and comprises over on.-thlrd of 101,1
utility' sales revenue, including ~ne~half of ~lectriclty sales.
6. The functlon.l use of fark opace has ch.nged dramatlc.lly ov.r the pa.'
15 years, as has the tenant mix and conne .. ·.t.~ons to Stanford.
The research and developmant e~ph,sls continue. to e'pand within tho
Park, although primarily within established companle,. Ther. Is very
little space av.llable for .tlrt-ups. H"uf.cturlng on mISS prQducllen
scale continues to be reloclted out of th< Park, while pilot production
scale f,cliities are retained. Blotech/ph,rolee"t<c.l cOfl:j>.nles h.ve
been the primary so~rce of floor area txpans1ons'wlth1n the Park during
tho past 10 years.
7. The connection of Park attiv1tits to Stanford acade~1c d~part~nts Is
not as strong and more scattered than anticipated.
Programmatic connections between companies and t~e UniverSity appear to
ha~! detreased 1n the past )0 to )5 ye~rs. Some older electr~nfcs
companies and new b1ot~ch compa~ies have established and maintained
connections with academic departments. ~~veral have Joint re~earch
projects with Stanford. However. the I; . .i":;<IrHy of COMpanies hl .. e let
'. "
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their connections lapse, of ten after founders and/or key research
per"o"el retired or left the company or after co""erelal success
reduced the companies' Interest in the University. No form.l m~chanls.
exists to fost,r University ac.demlc/Park research connection •.
Stanford Is concorned about· the int.rface of the Pork and "ademlc
communlt!es and Is Investigating ways to foster stronger Interactions.
B. Defense contracting is • smaller-than-expected component of the Park's
bUSiness activity.
Only thr .. companies are prirnarlly dependent on defense contract "ork.
Several companle. have rel.tlvely sm.l1 defer.se-orhnted contract work,
.nd are .ctively pursuing additional commercl.1 product development in
anticipation of expected defense spending cuts.
9. Over.l1, Park tenants h.ve favorable impressions of the City. They h.ve
also identified seme specific areas wh~re possible improvements can be
made.
The Fire Department. in particular, received u~ani~us praise for their
I!m~rgency response and hazardous material \II'orlc The CHy UtO Hies
Depart~ent was also well regarded, as was the Pollee Departm~nt. Areas
identified for possible i~provement were the Archltectur.l Revle. Bo.rd
review process and the pub11c rev few process for environmental review of
hazardous material ~ermits.
10. With the .xceptlon of tntersection improvements Identified In the
Citywide land Use and Transportation Study, maintenance and enhancerr:ent
of existing infr.structure (i.e., streots and utiltties) should be
h.ndled by exlslin9 City funding lev.ls .nd mech,n;sm'.
The 1989 Citywide Study identified eight Intersection Improv.ments to be
flJnde~ primarily by a traffiC fee on new sQuare footag-c developed· Ir. the
Res.arch Park. This Study h.s concluded th.t the r.te of n ••
development in the P.r' will be signific.ntly slower than assumed in the
Citywide Study and thus the .,.ilabl. funding less than antlcip.ted,
II. Potent hI ne. infrastructure generally does not have an identified
funding source. '
Possible additions to tne Park's infrastructure include sidewalks and a
reel aimed water"distribut1on system.
12. Monitoring of the Park can be done by tracking changes in a small number
of k~y areas.
'These key areas Include sa·les tax, electric sales, tmployment level,
traffit ilnd constru,c;Uon activity. However, it must be remembered that
these are symptomatic parameters and as such lag behind their tausatlve
agents. On·going tommunication between the City and Park tenants will
be critical to effective monitoring by providing insight into Park·
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rehted changes and d"elopment and a context for Interpreting the
IO.>nltored ~ata. .
The Parx IS in 0 tr.nsltlon period and will b. undergoing many changes over
the next 20 yoors. Many factors will be Influencing those change., mo.t of
which are outside of the City's direct 0" sole control. Inde.d, those Hme
factor, will cause change within the City as well. The dlroctlon change takes
c.n, to SODe degree, be Influenced, and the City has the ability t. exercls.
s~ Influence. The posltl.ns and policies the City adopts regarding the P,rk
will be viewed .s either thwarting change or trying to constructively
Influence It.
As with the Park at Its beginning, the combln.tlon of the right Ingredients
(comltment, res.urces, ond 1.ng·t ..... perspective) >nd active cultlv.tlon can
bring about • tr~ .. ndous ,ucces,. An opportunity pres.nt. Itself to continue
th.t succ.ss through ren.wed cultlv.tlon and actlv. Involvement In the
redev.lopment master planning of the Park. The City Is faced with tho
challenge of definin9 Hs c_lt"ent to and Involve""nt In that work. The
CIIy's fln.ncl.l health, In p.rt, Is dependent upon It.
This npo,'t identlflc. a varl.ty of let Ions th.t could be pursued by the City,
the Un{ .'-!rs1ty, and Park tenants, including bUSinesses operating in the Park
and OI>,",."S of le .. eholds. The listing of action. should be considered an
Initial agenda for discussion by repro,.nt_tlve. of the City, University and
tenants. All of the three parties h.ve crltlc.l role.. Establishing an on·
going co~nlcatlon process to evaluate I.sues and Id.ntlfy appropriate
courses of .ct~on is ""ro important than the Inlt1l1 w.rdlng of any particular
Issue Identified in this report.
Potential actIons contained In this report Include the following:
~Il Palo Alto I.iM Use planning .nd~"lop!!ent Acli2!!1
1. The City should continue to pursue sl.pllflc_tlon of the desIgn
rev1ew process for smaller s(ale changes to prev1ou~ly approved
site plans and buildings. Shortening the time neces,ary to obtain
design approval plus continuation of the express one·stop building
permit procedure can f.cillt.te for Park ten.nts and oth.r
applicants the completion of routln, building and site
""dlflc.atlo.s.
2. A collaborative effort should be undertaken by the City,
University and R.se.rch Park ten.nts to Identify desired speCial
facilities (e.g., child care, recreation, meetlllg and training,
and transportation faci11tl~s) and ways that the UniversityJ s
lease process and the City's d!velopment review and approval
process could be us.d to obtain the facilities.
, , 3. The City .nd the Unlve's1ty should Investigate way. 'e.g.,
tronsfer of development rights) to pl'ovide limited additional
4.
develoPM<nt flexibility for ,Ite, that aro dove 1 oped to their
•• "IRUR potential under current zonIng re9ul.tlon •.
The CIty should encour.g& upsra~lng of commercial propertle. on EI
C ... loo Re".l near the Research Park wUh the prl."ry objective of
IDprovlng the physical appearance of El Camino R •• l and also
encouraging cO«Aercl.1 actlyltles that c~,?l.ment the Park.
~L.ll.nford Land ".n ...... nl Act!o~
J.
2.
3.
4.
s,
Shnford should have an ongOing aggrusl •• Research Park planning
process starting with the current strategiC planning proce... The
planning p~t~ss .hould .~dro$s longer·term Park I,sue. such .s
deslr.d Park ttnant .Ix, potentIal. changes to the current mix of
p"'col shes. de.lr.d facnltl.s and program, .vanable to Park
tenants, ond .'Y' of developing, throu9h phy,Ical .n~ program
s!rategle., a ,pec1l1 Id.ntUy for th, Park.
5t.nford s~ovld develop .oys of linking Park tenants .nd .cademlc
d,partments 10 faelillol. !cenllflc.tlon of actlvltf.s th.t can be
IlUtullly bfnef1ctal ~o tenants, fictlHy l'~e~be"$ and students.
Stanford should continue Incre .. lng participation In the
H1) lvietf/Porte," .lind other ground'wlter cleanlJp efforts.
Stanford should d~velop a p.ark~tfn9 program to inform real estate
pr~f ... I.nlh Ind pohnlhl t.nanh of ~.rk·l·elahd Info"",atlon.
As Identified In th. land Us. Pl.nnlng aod Development Pollcl.s
sectioh J the City. Unjversity and Research Park tenants should
undertake , coll.borallve effort !o Identify desired spechl
faclltties and ways that the Vn1vers1ty's lease process an~ the
City', development re.l.w .nd approyal process could be us.d to
oblaln the facilitle •.
&. As IdentUhd In tI,e [aplo>,,",n! section, St.nford should conSider
a str.togy of .1100at109 lea.ehold. for start·up comp.nles,
potent!.l r.plo)~~ldJJtn
1. St.nford should con.lder a stralegy of .lloc.tlng l.as.holds for
stlrt·up CGOlp .. Io.. SpecIfic measures could Include buy back of
.,Ist!hg le.s.s .nd us. limitations with new le.seholds,
eSPQct~lly a5s~t!aled with redevelopment of Park sites.
potential ~r1AtloD Aetlonl
Researth Park tenants. the University and the City should develop
a C()ord1ru.tE'd strategy responding to the changing congestion
re1tef and air <1uallty regulatory environment. 1"lncluding expanded
progrll'i'l.$ and services to facilitate cotmluters using transit, car
P'ge i
z.
3.
4.
pools, bIcycles and other .Iternitly,s to the slngle'occupancy
co"",ul. Yehlcle.
The City should co"tlnu~ pursuit of the us. of c~re$$ed nalur.l
ga. p~.red or oth.r altern.tlve (uel vehicles by the City and
major e"l'loyers owning vehicle fleets. A ,ucc.ssful aHern.t1>',
fu.l yohlcl. progra. could bo an loport.nl el,ment In the
Congestion Han.gem,nt d.flclency pl,n process and retaining
development flexibIlity for the Plrk.
Park ten.nts, with .,sl.tance Iron tho UnIversity, City and Sant.
Cl,ra County Congestion Hanag~nt Agoncy, should explore the
desirability of a Shnford Res •• rch Pork Transportation H~n'9 .... nt
Assoclatlo" (THA). A THA might b. th, best .. ch.nlsA for
d,velopiOOnt of • Resul'ch Park·.lde transporUlion st"t09Y and
Implementation .ffort.
The City sho'id Inyestlg.t. ,u9~.hl1n9 ResclTch rnk tuffle"
mitigation funds with othel' funds, Including City 90s lox funds
anj County .nd St.t. funding.
5. Th. City should pursue a caplt.l Ir~roy.""nt project to upgrade
th, appe,r.nce of the rig. Hill Road ~.dl'n fron [1 C •• lno Real to
HISh .. y 180.
6. The City should Inv.stlgat. with Stanford and P,rk tenants,
policy regadlng proylslon of and pI)",nt (or ,Ide.,lks.
~~~w.t.r CI •• nu. Actions
1.
2.
The City should deyelopa coordinated v.t.r r.us •• nd dl.pos.1
polley. Key f .. tures would Include conser .. tlon of potable ""ter
supplies, reu,. of troatod water fr~ the Reglon.1 V.t.r Quality
Control Plant and f.clllt.tlon of the reus. of tr •• ted groundv.ter
resulting fro~ t~t on90tng ~nY'ron=entll cl~~nup or nUQerous
Research rark .It... The City and Stanford should JOintly
faclllt,t, a feasibility study for the use of r.el.l~ed w.lor
resulting fro,. cleanup efforts. ih. Inlthl study could foc"< on
the Hillvle. Portor and K.yfl.ld cl.anup ,r.,s, but some ,n.ly.l,
s~ould be deyoted to Individual sit.s wh.re I.pl.mentatlon Of
cleanup efforts Is to Ind.pendent c00p.ny responsIbility. This
st~dy should b. clos.ly coordinated with the City's alre.dy
Inltl.ted wast.w.t,r reuse study. Potentl.l use of the recl.l.od
w.ter froo both the Water Quality Cootrol Plant Ind Research Park
cleanup ,,(forts could Include Stanford campu.s landsup1ng .as t.·~11
as uses In the Park.
Representatives from cornpani~s Involved 1n 9r~undwater cleanup
actlyltles .long with Stanford and the City shOuld pelilloll the
Santa Clar. Valley ~at.r District (SCVWO) to w.lye the pu.p tax, a
charge levied by the 01strict on any extraction of 9round~ater in
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Santa Clara County. A possible outcome could be a requlrem.nt to
spend C~ amount equlv.lent to the pump tax on recla •• tlon
equipment to f,clllt.te the use of recl.lmed w.ter, with perhaps a
nominal payment made to SCVWO.
pot,ntla] Hal.rdgu1-Mller1al In~rgency RosRons, Aet1QDS
1. The City. should Increase the Integration of fir. Oep.rt~ent .nd
Water Quality Troatment Pl.nt d.ta bases to facilitate penolttlng,
Inspection .nd enforcement functions.
2. The City should deyelop • funding pl.n for outfitting ~Ith mor,
h.z.rdous material response equipment the emergency r.sponse
yehlcle recently order.d and expected to be dellYered In the raIl
of 1992.
3. The City should continue efforts similar to those Involyed with
the hazardous materials storage ordinance and tOxic gas ordinance
to regulate Industry by d.slgo of facilities r.ther th.n oor.
precise reg~lat1on of USfS.
4. The City should Inltl.te coordinated discussions with Park ten.nts
re~arding emergency resporlsf planning and the appropriate
e~u;pment and facilities.
~tlJLElectrlc. GIS and Hat .. UtU.lli Actions
I. T~. City, In coop.r.tlon with Research Park tenants and Stanferd,
should develop Research Park~spec1f1t electric, gas ind water
forecasts. The forec.sts should be closely lioked .lth the City's
environmental and develop~nt review process.
2. Stanford and the City should continue to emphasize new Research
Park landscaping d,sign guidelines for the use of drought tol.rant
plants.
3. lhe City should contlnu. to moni.tor deyelopment of <",pressed
nat~ra] gas and other alternative fuel vehicles and explore the
feasibility of 10catln9 • fueling station within th, Res.arch
Park.
Potent!'] Wastewater Utility Act1qo
1. The City should continue to explore use of reclaimed water wlt~in
the water service area. Subsequent to completion of the
feasibility study, c""flIerclal building plumbing system
modif,fcati<lns required to litilhe reclaimed water should be
identified and, where appropriate, incorporated into new
development.
p:\SRf'\Stuciy
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PQbnUa! Stqrp euln Ut!lltv Action
1. The CHy $hou~d underta~e ..•• "all pflot effort between the Re~lon.1 Water Quality Control Plant .nd the Storm Drainage
Utility to tre.t a s~all portion of the stonnw.ter prior to
discharge to the eay or ~euse by Res.arch Park ten.nts,
fqttnt101 Financial Actigns
1. The City and the Unlver.lty should do.elop • mutually acceptable
strategy to retain existing and obtain new sale, tax generating usc.s.
2. The Cfty should evalu.te the feasibility and do,lroblHty of
auditing the County property tax .110catlon process to determine
wheth., the City receives Its full share of secured and un,ecured property taxes.
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