The largest project in Santa Clara County's history got the axe just before noon on Nov. 1, when Catherine Palter, Stanford University's associate vice president for land use and environmental planning, sent a letter to county Planning Director Jacqueline Onciano informing her that Stanford was pulling its application to expand development on the campus.

"We regret that it is necessary for Stanford to withdraw the permit application, and we greatly appreciate the hard work of your office in reviewing it," Palter stated, alluding to the nearly three years of analysis that culminated in an environmental impact report, three meetings by the county's Planning Commission and three more by the Board of Supervisors, which was set to rule on the application on Nov. 5.

The decision provoked a wide range of reactions, including relief, anger and a mixture of the two. Students from the group Scope 2035 (Stanford Coalition for Planning an Equitable 2035), who had consistently argued that the university needs to do more to support its workforce, immediately issued an opinion piece saying they were "saddened and frustrated" by Stanford's decision, which they called "a stalling tactic."

"We think in a matter of a few years, supervisor elections will happen and there will be student turnover. Stanford will initiate this permit and it will be able to negotiate for having much fewer mitigation measures than we may have now," Kate Ham, a Stanford senior and member of Scope 2035, told the Weekly.

Joe Simitian, the president of the five-member Board of Supervisors and Palo Alto's representative, said he was surprised to see the university walk away just days before it was set to get the board's approval.

"I thought we were headed for a win-win," said Simitian, who sat on a two-member subcommittee charged with negotiating with Stanford and who had become a lightning-rod figure during the Stanford process. "The authorization of 3.5 million square feet over 15 to 20 years certainly would've been a substantial benefit to the university ... but I respect their decision."

For Stanford, now what?

Stanford, for its part, framed its decision as a chance to regroup after a process that had become increasingly contentious and that culminated in about 400 people cramming into Palo Alto City Hall for an Oct. 22 public hearing on the general use permit (GUP). Stanford President Marc Tessier-Lavigne said in a statement Friday that the university took this step "with regret, but with a clear-eyed understanding of the challenges before us in achieving a successful long-term permit at this time."

In the near-term, however, Stanford's options for campus development appear to be very limited. The university is authorized under its existing general use permit, approved in 2000, to construct 175,257 square feet more of net new academic and academic-support space, according to a new report from Deputy County Executive Sylvia Gallegos and Onciano of the Planning Department. Stanford has developed an average of about 98,000 square feet of academic development per year, not including housing. Based on that rate, Stanford will exhaust is remaining allotment for new academic space in about two years.

Stanford can still demolish and replace buildings, provided it doesn't increase the square footage. It can continue to build housing, provided it seeks and gets the approval of the county Planning Commission. It can also re-apply for a new general use permit at any time. Or it can propose a modification of the existing permit.

"The time needed to process a proposed GUP modification and (the) extent of environmental review would depend upon the nature of the modification proposed," the county report states.

Martin Shell, Stanford's vice president and chief external relations officer, said the university will take some time to assess its options.

"Our focus has been for the past many months on reaching an agreement with the county that benefited the county, benefited our neighbors and benefited the institution," Shell said. "We're going to have to take a pause ourselves to assess what the priorities are. We clearly heard a lot from the community over the past many weeks and months, and we want to reflect on what we heard."

When asked how Stanford plans to get the additional academic space that, according to its application, is needed to support newly emerging academic fields and allow the university to "maintain its leadership in teaching and research," Shell suggested that the university may have to shift its emphasis.

"We may need to focus more on people and programs for a while, and a little less on facilities," Shell said.

The mantra of 'full mitigation'

The beginning of the end for Stanford's application can be traced to a community meeting in March when, after more than two years of analysis, county planners released a sheet of paper with a set of conditions that Stanford would have to meet to win permission for its highly contentious campus expansion.

Stanford's application, which called for 3.5 million square feet of new development by 2035, had been going through the planning process since 2016 and, up until that point, things appeared to be going relatively smoothly. In October 2018, the Board of Supervisors authorized the use of a "development agreement" for the approval process -- a mechanism strongly favored by Stanford that would allow county supervisors to negotiate directly with the university over project parameters and community benefits. This was the first time that the county had ever approved the use of such a process.

And in December, the county released an environmental impact report for the campus expansion, which proposed managing the expected new traffic problems through the existing "no net new commute" requirement -- a recommendation that Stanford supported. And while the analysis also evaluated two new housing alternatives, each of which went well beyond the 550 staff housing units that Stanford had proposed, it stopped short of recommending either of these.

All that changed on March 14, when Simitian came to Palo Alto for a special town hall meeting on the general use permit, at which county staff's proposed conditions were publicly unveiled. These included a requirement that Stanford build 2,172 units of staff housing -- the most ambitious option studied in the environmental impact report -- and that Stanford meet more stringent traffic-reduction goals, including a mandate to limit average daily traffic and the number of reverse-commute trips.

The county's conditions came with a clear requirement: full mitigation of all impacts caused by the expansion. Because the county's nexus study showed that Stanford's plan would increase the campus population by 9,601 people, the university would be required to add significant amounts of housing. And because building thousands of housing units for staff and their families would likely bring more cars to campus, Stanford would have to redouble its transportation management efforts to prevent traffic jams.

Simitian made it clear at the beginning of the March 14 meeting, which was co-sponsored by the Palo Alto Weekly, that "full mitigation" wasn't just an aspiration. It was an imperative.

"For 20-plus years, as long as I can remember, local communities up and down the Peninsula have told their constituents that when they approved a project, the impacts were fully mitigated," Simitian said. "Twenty years later, traffic is worse, not better; housing is worse, not better. So I think there is a fair measure of skepticism out there in the community, which I understand, as to whether or not full mitigation is a real thing.

"But I think in this process, it has to be real and that ought to be not only an aspirational goal but a very realistic goal and one that we achieve, whatever decision the five members of the Board of Supervisors ultimately make."

Over the ensuing months, "full mitigation" evolved into a rallying cry for local residents, Stanford students, university staff, the Palo Alto Unified School District Board of Education and elected officials from cities in both Santa Clara and San Mateo counties. Advocates for Palo Alto schools carried signs at rallies in the spring and fall demanding full mitigation. Stanford students incorporated it into their chants and speeches.

Los Altos Councilwoman Anita Enander requested "full and fair mitigation" at the Sept. 24 hearing of the Board of Supervisors when she alluded to Stanford's recent purchase of an apartment building that comprised 10% of her city's multi-family properties. And at the Oct. 22 meeting on Stanford's GUP application -- the last public hearing before the university withdrew its application -- East Palo Alto Councilman Carlos Romero, San Mateo County Manager Mike Callagy, Menlo Park Councilwoman Betsy Nash and Palo Alto Mayor Eric Filseth each used the phrase in making their requests to the Board of Supervisors.

Filseth acknowledged that if Silicon Valley were to expand, the expansion would carry costs.

"Without full mitigation, too many of those costs will fall on the shoulders of people don't deserve to pay them and in many cases can't afford to pay them," Filseth said.

In a jam over traffic requirements

The insistence on full mitigation, while theoretically reasonable, became practically untenable for Stanford, which found itself facing approval for a project it didn't ask for, one with 2,172 housing units and new traffic restrictions. As the county's Planning Commission reviewed the proposal over the summer, university leaders protested that the county's housing conditions would turn the university's campus into an "urban apartment complex" and result in more than 1,000 new vehicle trips in the evening peak commute hour.

Palter pointed to Stanford's own traffic analysis, which showed that to comply with the new "reverse commute" restriction, the university would need to "generate trips at a rate that is less than that generated by housing in Manhattan."

"This is simply impossible on the San Francisco Peninsula where Stanford is located," Palter said at the June 27 meeting.

The Planning Commission largely sympathized with Stanford and requested that the county consider alternative measures to curb traffic. Commissioners Bob Levy and Marc Rauser each argued that this traffic mitigation would put too large a burden on Stanford, particularly with the county also requiring more than 2,000 new housing units for staff. Levy noted the county's condition that 70% of the workforce housing get built on campus. Even if Stanford staff who live on campus won't have to drive to work, their spouses and roommates might -- to get to their workplaces elsewhere in the county, Levy said.

But while Stanford argued that it was being asked to do the impossible, the county's team disagreed. Geoff Bradley, the planning consultant in charge of the environmental-impact report process, acknowledged that the university would need to add new transportation services but suggested that Stanford University is "one of the few places in the county where you can do this, where all of these pieces come together."

"The goal really is to create a dense, compact, comfortable environment and not repeat the auto-centric environment where everyone does have to get into their car," Bradley said.

Disputes over traffic restrictions dogged the process until the very end. On Oct. 21, Robert Reidy, Stanford's vice president for land, buildings and real estate, proposed a different approach to manage traffic: keep the existing "no net new commute trips," require the university to make intersection improvements to address the increase in reverse commutes and replace the existing "daily trips" standard with one that considers a "vehicle miles traveled (VMT)."

But with the county preparing for its final scheduled hearing on the general use permit, it became clear that the board was unlikely to budge from the conditions of approval recommended by the county. Just before the Nov. 5 hearing, Simitian and Supervisor Cindy Chavez proposed in a memo some revisions to the conditions, including new provisions that would give Stanford "trip credits" for providing child care services, for constructing affordable housing and for providing Marguerite bus service (or another transit service) to non-Stanford-affiliated people in East Palo Alto, Menlo Park and unincorporated San Mateo County. These credits could be applied to the county's tallies of reverse commutes and average daily traffic.

That, however, was not enough for Stanford. Shell told the Weekly that the university had commissioned numerous traffic engineering firms to evaluate the county's conditions and to see if they were feasible.

"The analysis kept coming back that they were infeasible," Shell told the Weekly. "And the penalty of that -- if we were unable to meet those conditions -- meant immediate suspension of construction of new development. We didn't feel we were in a position to accept conditions that we did not believe we could meet."

A deal -- or a deal breaker?

If disagreements over conditions of approval sowed the seeds of a stalemate, one incident in the spring created a fissure between the county and university so great that neither one could span it during the months that followed.

In mid-March, Stanford and the Palo Alto Unified School District kicked off a discussion of how the university could compensate for the new students who would be living in new Stanford housing and attending district schools. Under state law, counties and cities are unable to impose requirements on developers pertaining to schools beyond a school-mitigation fee, and the district would have been eligible for only about $4.2 million from Stanford, far short of what would be needed to educate the hundreds of new students.

After several days of negotiations using a professional mediator, the two sides unveiled on April 15 the result: a $138-million deal under which Stanford would provide the district between $5,800 and $8,450 for every student that Stanford's expansion would bring to the campus; $15 million for an "innovative space" that would be shared by the university and the school district; and $500,000 for various transportation improvements near schools.

The deal, however, came with a key condition. It was contingent on the county inking a development agreement with Stanford.

For Simitian and Chavez, that was a deal breaker. One day after the deal was announced, Simitian stated that he and Chavez were indefinitely suspending their negotiations with Stanford on a development agreement. By conditioning its mitigations for schools on a broader development agreement, Stanford was using Palo Alto students as a "bargaining chip" to get out of other requirements such as housing and traffic mitigations, Simitian told the Weekly at the time.

"What we're faced with now is, in what purports to be an agreement, is a pretty explicit threat: If you don't back off on expectations of traffic mitigations and open space protections, we won't honor our commitment that we made to the school kids in Palo Alto," Simitian said. "That's not a good-faith effort."

County leaders also argued that Stanford had violated the ground rules for its negotiations with the county. The ground rules allowed Stanford and the county to discuss the development agreement with other "interested parties," including public agencies, but expressly prohibited making "a deal between the party and the interested party that would be presented as a proposal during the negotiations period."

The county's decision to call-off negotiations rankled some Palo Alto Unified board members.

"If the end result is that our students get less, then I think Supervisor Simitian will inevitably be blamed -- and properly, in my opinion," board member Ken Dauber said at a May 14 meeting.

But while Simitian and Chavez rejected Stanford's proposal for a development agreement, they continued to call for Stanford to maintain its pledge to the Palo Alto school district, at one point making it a condition for reopening the negotiations.

Once closed, however, the negotiations between the county and Stanford never reopened. County staff and supervisors opted to stay the course on using a traditional approval process while Stanford consistently argued that by providing significant community benefits upfront, it would need a development agreement to provide guarantees of the county's approval for future development. Reidy wrote on Oct. 21 that the development agreement is "the only legislative tool that can provide such predictability -- there is no other."

"It is undisputed that county laws and regulations that affect Stanford's academic and housing development under the general use permit can be changed absent a development agreement," Reidy wrote. "For example, the county could impose new fees that would make development under the general use permit economically infeasible. This is the type of uncertainty that dissuades an applicant from investing in long-term planning and prevents an applicant from committing to expensive community benefits that go beyond the conditions of approval."

But county staff saw Stanford's insistence on a development agreement as a way to negotiate its way out of the conditions of approval. In June, when several Planning Commissioners signaled their interest in having more negotiations with Stanford, Gallegos reminded the commission: "This is not a negotiation process. This is a regulatory process."

"We don't negotiate away conditions of approval," Gallegos said.

Some pressure, then the stalemate

The tension between Stanford and its critics reached its apogee on Oct. 22, when the Board of Supervisors convened at Palo Alto City Hall for what turned out to be the final meeting on the general use permit. Prior to the meeting, more than 100 Stanford students chanted, "Cut our housing? We say no. / Stanford has got to go!" and "Down, down with exploitation! Up, up with mitigation!"

Speakers talked about the need to keep the university accountable for the impacts of its growth. Erica Scott, president of the Associated Students of Stanford University, drew applause from the assembled crowd after she accused the university of having an "incredibly conservative bias."

"It means that whenever Stanford is making a decision, it will always prioritize its interests first. That's how institutions operate," Scott said. "Student pressure is absolutely vital in forcing Stanford to create decisions that are inclusive in their scope and that take into account repercussions that echo beyond Stanford campus."

Things got even dicier at the meeting itself, with close to 300 people packing into the Council Chambers and spilling over into the lobby, where the meeting was televised. Some of the public speakers, including Stanford doctors, nurses and professors, spoke in favor of the university's request for a development agreement.

Buzz Thompson, a Stanford law professor who had previously served as head of the Woods Institute for the Environment, told the board that the institute's headquarters, which was made possible by the 2000 general use permit, was "crucial to our success" and urged the board to support the new permit. Jonathan Levin, deal of the Stanford Graduate School of Business, made the same request.

"Growth is intrinsically tied up with the excellence of the university," Levin said.

But of the roughly 140 people who spoke, the vast majority urged the board to require "full mitigation" and to hold the line on the county's conditions of approval. These requests came not just from residents who tend to view most new developments with skepticism. They also came from dozens of local officials, many of whom had praised Stanford at prior hearings, from public-school advocates wearing "Full Mitigation" stickers and from hundreds of Stanford students, including undergraduates, graduate students and postdoctoral scholars.

Graduate student Alexa Russo spoke on behalf of Stanford Solidarity Network, a group of graduate students and postdoctoral scholars, who requested more support in terms of housing and child care services.

"While we do different jobs and face different conditions, we are linked by our dire need for affordable housing and our concern about the equity implications of Stanford's development plans, not only for us but the community as a whole," Russo said.

After the Oct. 22 meeting, Stanford and the county continued to exchange proposals in hopes of breaking the stalemate. Days before the scheduled Nov. 5 hearing, Stanford presented the county a "proposed motion," which called for suspending the hearing and directing the county executive to "ensure" that county staff and Stanford representatives meet regularly between now and Feb. 1 to "work collaboratively toward a revised set of draft conditions of approval that are feasible and that establish clearly defined requirements."

Simitian and Chavez proposed their own conditions, including trip "credits" for reverse commutes and average daily traffic; a new study to create "affordability standards" for graduate students; and the establishment of a "school operations funding formula" along the lines of the one contained in the doomed agreement between Stanford and the school district.

The conditions, however, proved moot. As Nov. 5 approached, the two sides weren't getting any closer to consensus, they told the Weekly. Facing the prospect of a Pyrrhic victory, the university decided to walk away.

Who's responsible?

Jean McCown, Stanford's associate vice president for government and community relations, who took part in the last-minute discussions, said it became apparent to Stanford that the board majority wasn't willing to delay its consideration of the application or to consider a development agreement, as Stanford had requested.

"We did not get any affirmative answers. We didn't see that the position on the county's side was changing," McCown said. "Since we've been very consistent that the development-agreement piece is critically important to what we'd like to do and what we think the community would like us to do, we didn't see how we could move forward."

Stanford President Marc Tessier-Lavigne, who was not available for an interview for this article, issued his own letter to the Stanford community on Nov. 1, explaining the university's decision to withdraw and promising a "new phase of engagement with our local communities."

"Through that process, we hope to gain a deeper mutual understanding of the challenges facing our region, how Stanford can best enhance its contribution to addressing those challenges, and what the implications are for our long-term campus development," Tessier-Lavigne wrote.

But some critics of the proposals, including members of Scope 2035, believe that by withdrawing its application, the university is seeking to avoid -- rather than engage -- the students who have been calling for the university to do more. Ham, an urban studies major, lamented that they and other activists will soon be graduating.

Convinced that Stanford's strategy amounts to waiting its critics out, Ham said the group is now focusing on passing its knowledge to the next generation of student activists.

Others have blamed the county and Simitian for halting negotiations with Stanford in April. Supervisor Dave Cortese voiced his frustrations at the Sept. 24 hearing, at one point accusing County Executive Jeffrey Smith of "running a rogue operation" by not considering a proposal from Stanford in June and not submitting any counter-offers.

Dauber, meanwhile, criticized Simitian for proposing a "school operation funding formula" for Palo Alto schools that would fall well short of what the university had offered in April. Both he and board Vice President Todd Collins said they were taken aback by the fact that the district wasn't consulted before the formula was proposed.

"It's hard for me to understand how this fits with the collaborative, respectful relationship between the governing bodies to have no consultation with district," Dauber said.

Simitian said he believes that the issues that came up over the course of the approval process -- and the "full mitigation" standard -- will not go away any time soon. Simitian's seen Stanford protest new policies before and then ultimately accept them, namely during the last general-use permit approval process in 2000.

Simitian, who served on the board back then, said the 2000 process resulted in a new "housing linkage" policy (which requires Stanford to provide 605 housings units for every 500,000 square feet of academic space), a "no net new commute trips" standard and the existing policy on protecting the foothills from development.

Simitian's take on Stanford's withdrawal is simple: The university "didn't want to fully mitigate the impacts of development."

"Not sure that will serve the university well in the years ahead, but it's their right to make that choice," Simitian said. "In this climate, getting approval for 3.5 million square feet of development and pre-authorization for 20 years is hard to imagine.

"Yet we got there. As long as there was full mitigation."

Related content:

• Over the past year, Stanford and Santa Clara County clashed over numerous issues. Here are three key points of contention.

• Palo Alto Weekly journalists discuss what led to the withdrawal of Stanford's application on the "Behind the Headlines" webcast and podcast.

• Editorial: On the eve of county approval, Stanford withdraws its development application and forfeits years of work. There was a better way.