Menlo Park: Stanford, council negotiators strike deal for schools

This agreement should not be approved until the city shows how much the services provided to Stanford by the City of Menlo Park will cost, how much any traffic mitigation needed due to Middle Plaza will cost, AND Stanford agrees to pay at least 75% of the ACTUAL costs of the bike/pedestrian tunnel. Otherwise, the City is getting a POOR deal. The City Council needs to show clearly why it would accept it. Residents deserve this information.

I am confused by the claim that the private university, Stanford, would not pay property taxes on its property in Menlo Park. I thought the tax exclusion only pertained to religious institutions, not to non-public schools. Is this accurate?

@History Guy

The tax exclusion applies to any educational institution's property as long as that property is being used for educational purposes. That exclusion extends to housing for faculty and students since their purpose for living there is to further the education purpose of the institution.

As soon as the property is turned over to a non-education use, it become taxable property. However, I believe only the building basis of the tax applies. Stanford acquired the land so long ago, the land value is very low. Thus, the building is taxed at market rate at the time it is built, but the land is not.

This educational institution tax policy has the good intention of making it easier for colleges to financially exist in more expensive neighborhoods, but Stanford has perverted this policy.

Stanford is the largest private land owning non-government institution on the peninsula. It has billions of dollars in reserves and generates very high revenues. Moreover, rich donors add to its coffers every year. It does need the tax break when many of our government institutions do in order to service Stanford employees and students.

It can afford to sit on this empty land in perpetuity because it pays no taxes on it. A private speculator would be forced to pay yearly property taxes on it. When Stanford does build, it only pays property taxes on the building, but very minimal amount on the land. Since the land is never transferred ever again because Stanford never sells, the land basis property tax is never stepped up to market rates.

Basically, Stanford is using a tax loophole available to educational institutions, but acts as a private developer. It keeps all the profits, then lets its neighbors bear all the costs.

When the school districts come back in a few years with a parcel tax increase, you can thank Stanford since it isn't paying its fair share. It's even more galling because we, the people, have to make up the difference that Stanford does not.

I have previously proposed that Menlo Park eminent domain the property and sell it to the highest non-educational bidder. By selling it to the highest bidder, Menlo Park would legally fulfill its obligation of making Stanford whole. The private bidder could take Stanford's plans and construct the same buildings. In private hands, the land cost tax basis would step up and both buildings would be 100% taxable even if it was rented out to Stanford people. That would make the community whole and be fair.

When the Council adopted the DSP and Stanford submitted a DSP compliant plan without seeking any bonuses there was nothing left for the City to negotiate except to appeal to Stanford's good will.

A DSP which absolutely and intentionally ignored the impact on the schools and the Fire District was a fatal and irreversible mistake by the city.

Don't blame Stanford for the city's mistake.

Here is what happens when a city screws around with a property owner who wants to develop property consist with the established zoning ordinances:

Web Link

Menlo Park turned down two development proposals from Stanford that complied with the current DSP zoning ordinance and now wants to "negotiate" on Stanford's third proposal. Why is anybody surprised that Stanford has lost patience with the city and decided to utilize its tax exempt status.

Our council is outwitted again. Stanford which one of the richest educational institutions in the world is tax exempt and will have their kids use the public schools which comes from our taxes. This is an opportunity to have them pay their share of what we all have to pay. 1.5 million is nothing. It just seems no one knows what they are doing in our council. At 215 apartments the 1.5 million comes to 6900 per unit. I know I pay more in property taxes than that yearly. Their 6900 is a one time fee. Honestly, we need direction and educated council members to get smart and stop this until they recognize 1.5 is nothing. At 215 apartments, say each unit has 2 children going to the schools, that would be 430 kids in our already overcrowded schools. I just cannot believe this the council sees as a victory. Just stupidity.

Jim Cogan's office places a $70K to $100K fee for new construction; per unit. What did Stanford pay? I would seriously like to know. Fees have tripled in the past year. Who runs this town?