Palo Alto leaders urge Stanford to pay more in taxes, build new housing

STANFORD — Palo Alto leaders on Monday urged Stanford and Santa Clara County to consider the city’s needs as the three draw up a new community plan for the sprawling university that addresses housing and transportation .

During a study session on a new proposed community plan Monday — based in part on two previous plans crafted in 1985 and 2000 — Palo Alto city council members urged Stanford University to pay more of its fair share in property taxes, deal with transportation issues plaguing the area and commit to building housing for students before expanding academic buildings.

Since the 80s, Palo Alto, Stanford and Santa Clara County have agreed to create a framework for future development of the campus, focusing on Stanford’s use of municipal services — like sewers, storm drains and traffic cops — and how it can reimburse communities for that use as well as deal with its impact on surrounding communities.

As a tax-exempt institution, Stanford University doesn’t pay property taxes on most of its properties, and given its impacts on the surrounding community, Palo Alto and county leaders sought to define exactly what kind of development would be governed by the community plan. That plan, since the 80s, has included housing, which county and city leaders believe is a huge piece of the puzzle for reducing Stanford’s impact on the wider Bay Area.

The impact of new housing on campus would be huge: Just 7% of university faculty, staff, students and other workers currently live on campus, meaning thousands of others must live in surrounding communities. Stanford has about 60 homes for faculty and staff, 4,400 new dorms for students and 1,023 new faculty and staff housing on Stanford land grant properties.

Still, Vice Mayor Lydia Kou said the university could be paying about $19.7 billion in estimated property taxes — about 13.3 billion of which is tax-exempt property — that could help alleviate some of the surrounding communities’ issues. She said the city is not doing enough to get as much revenue from Stanford as possible.

“Obviously we have concerns about property taxes,” Kou said. “The city is falling short in collecting revenues. And in addition to that, as Stanford purchases more of our property, some of the housing in town gets bought up. That means we’re going to lose more property taxes from them.”

Councilmember Tom DuBois agreed with Kou, adding that he believes the university should include in-lieu tax payments to the city. Like some Ivy Leagues on the east coast, Stanford has a long-standing agreement to pay for its use of municipal services, but DuBois said that should “ultimately be headed to a payment of in-lieu tax and coming up with a way to divide those fees to the agencies providing the services.”

“Things like Children’s Library services, things like parking enforcement or the cost of running residential permit programs along the boundary with Stanford and even things like storm water runoff,” DuBois said. “We need to make sure we’re accounting for all of it.”

Leaders also want Stanford to help with Caltrain’s massive electrification project which calls for expensive rail-grade separation projects up and down the Peninsula, including in Palo Alto. The city’s Caltrain station is one of the system’s most used, and Kou believes many of them are Stanford students who benefit from the transit connection. She said Stanford should be paying for that too.

“We need to get Stanford involved in terms of discussions for funding and planning the new station and an intermodal transit center,” Kou said. “This is a tri-party agreement, there’s three of us that are supposed to be in communications. We need to be involved as much as possible, that’s very important.”

Mayor Pat Burt praised the Board of Supervisors for its commitment to pushing Stanford to move beyond its current housing plan and provide homes for post-doctoral workers. But he said Stanford also has an obligation to house its service workers, many of whom live in East Palo Alto, the closest affordable community in the area.