BY DAVE PRICE
Daily Post Editor
When you’re in a difficult negotiation and feeling pressured, sometimes the best decision is to say “no.”
That would be my advice to the Palo Alto school board about the offer they’ve received from Stanford regarding money to educate the students who are expected to fill the schools after the university completes its 3.5 million-square-foot expansion.
After I wrote an editorial about this on Wednesday (you can find it at padailypost.com), I’ve been getting phone calls and emails asking questions about my position, so I’ll try to answer those questions here.
Q: If the school board accepts this offer, how does it affect Santa Clara County’s negotiations with Stanford over the growth permit the university is seeking?
A: It gives Stanford undue leverage in those negotiations.
County Supervisor Joe Simitian is trying to make Stanford fully mitigate all of the problems this massive development would create, especially when it comes to increasing the housing demand and putting cars onto local streets and highways.
In the past, elected officials have been satisfied if a developer partially mitigated the problems they created, but Simitian is going for 100%. Stanford is seeking something less than full mitigation.
In the negotiation process, Stanford could argue that if they don’t get their way, they’ll walk away from their agreement with the school district. The district will become the university’s pawn. Stanford will be able to hold the district and its students hostage to its demands.
Q: You called this a lousy deal for the schools. Why is that?
A: Stanford — which is exempt from property taxes on much of its land — is offering about $5,800 a student per year to the district. But the district’s cost of educating a student is $19,200. Instead of full mitigation, Stanford is offering 30% on the dollar.
If Stanford gets away with 30% mitigation, maybe they’ll argue that they should only have to mitigate the housing demand they create by 30%, and traffic by 30%?
The deal also says that Stanford won’t even talk to the school district about a location for a new school on campus until 2032 — 13 years from now. Yet the deal also confirms that Stanford’s expansion will increase enrollment by 275 kids by 2023 and 500 by 2029. The only solution offered in the deal is to pack these kids into the two PAUSD schools on campus, which are already crowded, with 527 kids at Escondido and 446 at Nixon.
In other words, in accepting this deal, the school board is saying it’s OK to have elementary campuses with 700 kids or more. And there’s no commitment for another school on campus, just a promise to talk someday.
Q: What if Stanford says, “Take this agreement now because we won’t offer it again”?
A: Then you’ll know Stanford isn’t sincere about solving the problems they’ll create in the school district and that the only reason they’re offering this deal now is that they want undue leverage in the negotiations with the county.
Q: OK, say the board declines the offer. Will the school board have any leverage to force Stanford to keep or improve its offer after the county negotiations end?
A: It’s pretty clear from this low-ball offer that the school board doesn’t have any leverage now. The district’s negotiators didn’t force Stanford to do much of anything.
Legally, the district doesn’t have much of a hammer — it can demand about $4.2 million in one-time-only developer fees, and that’s it.
The school board’s real clout is in the court of public opinion. Palo Altans are intelligent and fair-minded. They will expect Stanford to fully fund the cost of public school students coming from university housing. A 30% deal means residents in the rest of the community have to subsidize a $6.3 billion enterprise with a $26.5 billion endowment. That will look awful. A public relations disaster. Stanford spends so much time and money trying to burnish its public image. Imagine what the nation will think when this makes the front page of the New York Times or is the focus of a “60 Minutes” segment?
I think Stanford President Marc Tessier-Lavigne will feel pressure to go for 100% mitigation from his own faculty and employees, whose children will be attending the Palo Alto public schools.
It’s easy for outsiders to think of Stanford as a monolith with one point of view and everybody walking in lockstep. But sharp debates go on within the university on things like this, and department heads have a lot of autonomy and power. If the university tries to shortchange the schools, there will be loud public dissent from distinguished faculty.
The school board needs to politely tell Stanford that they appreciate the offer, but they’re going to postpone action on this agreement until the county growth permit is complete.
That could be a couple of years because, while it’s likely the public hearings over the permit will conclude this year or early next year, Stanford is already suing the county and that will need to be wrapped up before anything goes forward. And if the final deal from the county isn’t for 100% mitigation, I think it’s likely that Palo Alto and other cities could sue over this. So much needs to happen before the school board is in the position to make a strong deal with Stanford.
Editor Dave Price’s column appears on Mondays. His email address is firstname.lastname@example.org.
An update — an earlier version of this column said the school board would be considering the offer at its Tuesday, April 23, meeting. However it does not appear on the agenda and the date for the item returning hasn’t been set.