In a city teeming with major development applications, few fuel hopes and raise anxieties like Jay Paul's grand plan for 395 Page Mill Road.

The project, which the San Francisco-based developer pitched last year, is still in the early stages of Palo Alto's review process. It would bring 311,000 square feet of office space to a commercial site that currently houses AOL's Silicon Valley headquarters and that is already built out to the maximum of the zoning limit. In exchange for approval, Jay Paul is proposing to deliver to Palo Alto a prize that has been eluding and frustrating city officials for well over a decade -- a new public-safety building.

The project is still at least a year away from getting the city's final approval, but it scored a major victory on Wednesday night when the Planning and Transportation Commission voted 6-0 after a long and wide-ranging discussion to initiate a zone change that would make the project possible (Vice Chair Mark Michael was absent).

In terms of sheer size and scale, the project is the most ambitious of the many "planned community" proposals that the city has received in recent years (John Arrillaga's concept plan for 27 University Ave. in downtown Palo Alto was a close second before the City Council decided last December to consider other alternatives for the site). Under the planned-community process, developers request zoning exemptions in exchange for "public benefits" that they negotiate with the city. In this case, both the exemptions sought and the benefits are unprecedented in scale.

Typically, developers offer things like public art, affordable housing, small parks and retail amenities as benefits. In this case, Jay Paul is offering to spend $49.3 million on a new police building. The existing headquarters has been found by numerous advisory commissions to be too small and seismically insufficient. On Wednesday, May 29, staff and planning commissioners agreed that a benefit of this sort is unheard of when it comes to planned-community projects and praised the developer for proposing it.

Planning Director Curtis Williams told the commission the public-private venture proposed by Jay Paul is "unique." Commissioner Michael Alcheck called the benefit "off the charts."

But Williams and commissioners all emphasized that the city still has plenty of homework to do before the project gets the final green light. Among the biggest wildcards is the development's effects on traffic and parking, which are yet to be evaluated and which will be the subject of an upcoming environmental study. The commission's decision Wednesday to initiate the zoning change effectively allows the city to proceed with the state-mandated analysis.

Planning commissioners agreed that the public benefit pitched by Jay Paul is unusually generous. Commissioner Greg Tanaka called it "compelling." Commissioner Alex Panelli agreed and, despite concerns about the already high level of traffic in the area, agreed to move forward with the zone-change initiation.

"You're offering a substantial public benefit. I'm well aware of the value," Panelli told Ray Paul of the Jay Paul Company. "What I'm concerned about is this project could introduce -- in exchange for a one-time upfront benefit that has value for many yeas -- we'll have years and years and years of ongoing downside because of the potential traffic and parking problems."

His colleagues were equally ambivalent about the project's ultimate viability, though they all agreed that the opportunity deserves further study. Alcheck said he was "excited" about the proposed benefit and wondered aloud whether the city is "getting away with murder or not" in the deal being offered by Jay Paul. He said he looks forward to seeing how the process unfolds.

"I don't know if this can occur in any other city this size -- such an offer," Alcheck said.

Though the project has yet to undergo an architectural review and the rezoning remains in its amoeba phase, the proposal has already cleared several major. The original design for 3045 Park Blvd. had the new public-safety parking sharing space with a garage, which would be shared by police officers and workers from the new office buildings. In the design the commission saw Wednesday, the public-safety building is a separate facility. The new design also includes 1,329 parking spaces, 153 more than initially proposed.

Jay Paul and its architect, Tom Gilman of DES Architects, also made substantial revisions to the police building after city officials expressed doubt in April about the site's ability to accommodate the Police Department. Previously, city officials and their consulting architect, Michael Ross, felt the proposed building would not meet the department's operational needs. But over the past two months, Ross and staff from the police, planning and public works departments worked with Jay Paul's team to make numerous revisions to the building. On Wednesday, Ross and Police Chief Dennis Burns both lauded the proposed police building and expressed full confidence that it would meet the city's needs.

"We believe it's going to be a very suitable building," Burns said. "It's going to last a number of years and it's going to be something that's going to provide for great operations, for police, fire, OES (Office of Emergency Services) and our dispatch center. We're very satisfied."

Fire Chief Eric Nickel, whose department would also use the new building for administration, concurred and said the new building would allow his department and the police to combine their management and executive staff. The proposed building, Nickel said, would suitably accommodate his department, which would require a small footprint because most fire personnel are scattered in fire stations throughout the community.

"I can tell you unequivocally, from my perspective, from fire needs, this meets and exceeds certainly what we have now and what we plan for in the future," Nickel said.

The office development proposed by Jay Paul consists of two four-story buildings, each 58 feet in height. It would occupy an area already undergoing major changes, with other major new developments proposed for nearby sites on the corner of El Camino and Page Mill Road (a parking lot formerly owned by the Santa Clara Valley Transportation Authority) and on the 400 block of Page Mill, where four single-family residences currently stand.

Planning Commissioner Carl King voiced some skepticism about bringing another major development to an area that he said is already overdeveloped and suggested that the city's process may amount to little more than "zoning for sale."

Several area residents also raised red flags when discussing the potential impacts of the proposed development. Michele Sullivan, who lives a block away from 395 Page Mill Road, argued that the development would have a significant negative impact on the residential neighborhoods around the site.

"We still believe that the square footage of the project is grossly out of scale as to the site upon which it will sit and the neighborhood in which it will be located," Sullivan said. "The project has the potential to add to our long-standing traffic and parking problems. Despite repeated concerns expressed by neighbors, new developments along El Camino have been approved without adequate consideration for their traffic and parking consequences."

Marcus Woods, representing himself and developer Harold Hohbach (who has built numerous residential and commercial projects in the area) also urged the commission to request a reduction in height and estimated that the new development would net Jay Paul about $100 million in profits (a number that the company disputed). The city, Woods said, has to decide whether the "ensuing traffic and mortgaging of Palo Alto's future" is worth the new public-safety building.

But Ray Paul argued that the company is taking a risk with this development and indicated that it would not be willing to reduce density or offer more in benefits. The public-safety building, Paul said, is "the most significant contribution we've ever tried to make."

One reason the company can afford to be so generous in its offering to the city is the high rents in Palo Alto, particularly for office space. Even so, he said, the company is already on the "edge" of where it's willing to go.

"This is about the limit of where we can go," Ray Paul said. "If we try to push this further, the answer is that we just wouldn't do it."

"We don't think it's an outrageous steal for us, nor do we think it's a bad deal for us," Paul later added. "We also think we're kind of on the edge of what we're willing to do and what we can sensibly do. We have to have a project we can finance."

The commission agreed that while the project leaves many questions unanswered, it will take further analysis to answer them. Even King, the most skeptical of the commissioners, joined the rest of his colleagues in approving the initiation of the zone change.

Commissioner Arthur Keller called the public-safety building "a real tangible benefit" and applauded Jay Paul for proposing something so "creative." He also said he hopes the benefit in this project sets a precedent for other developers to follow when they pitch planned-community proposals.