Hoping to revive the city's languishing effort to rebuild Cubberley Community Center, a popular Middlefield Road hub, Palo Alto City Manager Ed Shikada is proposing a 55-year lease from the school district.

The proposal, which the City Council plans to discuss on Oct. 16, would significantly increase the city's portion of Cubberley, an eclectic but aged 35-acre community center that once functioned as a high school and that today includes playing fields, theater space, classrooms, artist studios and nonprofit spaces.

Currently, the city owns 8 acres at Cubberley, while the Palo Alto Unified School District owns the remaining 27 acres, most of which it leases to the city for an annual payment of $2.5 million. There are also portions, such as parking lots, shared by the two entities.

Both parties have benefitted from this arrangement, which provides the city assurance that the existing community uses will remain at Cubberley and which allows the school district to collect annual payments while reserving some land for academic purposes (this includes space for the Hoover Elementary School students, who are now using Cubberley while their campus is being renovated).

But the existing partnership has also made it difficult for Palo Alto to chart a path forward for refurbishing the dilapidating center.

Palo Alto's most serious recent push to do so sputtered in 2019, when a community-crafted vision for completely redeveloping Cubberley collapsed once the school district indicated that it had no interest in demolishing the existing gym and theater. The district made it clear that it legally cannot move ahead with a revenue measure for redeveloping Cubberley because the project is not primarily educational in nature.

The debate extinguished any community hopes for a joint partnership between City Hall and the school district on Cubberley redevelopment.

Now, the two parties are preparing to start afresh. In March, the school board submitted a letter to the city indicating that it's ready to make a deal for up to 7 additional acres, which would leave the city with 15 acres and the school district with 20.

Board member Shounak Dharap noted in the letter that while the district would like to retain 20 acres for a possible future school development, it will "not automatically foreclose a deal that might include a transfer of more than 7 acres." The district, he noted, is "flexible about the exact location of the City's acreage based on the needs of the City's planned development, subject only to a few limited considerations for the future school site like street access and neighborhood proximity."

"We are also open to the form of the deal — whether it's a land swap, ground lease, or some other vehicle for land transfer," the letter stated.

A new report from the Department of Community Services makes a case for signing with a 55-year ground lease, which it calls "the most expedient way to begin the public planning process for improvements of greatest interest to the community."

Based on a map showing the proposed areas that would be leased long-term by the district to the city, most of the 27 acres, save for a few buildings currently used by the district, would be under city control.

Significantly, the long-term ground lease would obviate the need for the city to relinquish ownership of other city properties, as has previously been contemplated. The council has been toying with the idea of swapping city-owned sites for Cubberley land, with Terman Park emerging as a leading contender.

In recent months, however, residents who live near Terman Park have come out strong against such a swap, which they argued could lead to diminished park access for the neighborhood.

Frankie Farhat, who lives close to Terman Park, was one of several area residents who lamented the prospect of losing access to the park. Farhat noted that the city is already failing to meet its goals for local parks.

"By swapping Terman for Cubberley, we will lose even more green space," Farhat said.

The council last discussed Cubberley in August, when members rejected a staff proposal to hold a closed session discussion of the potential redevelopment and opted to schedule a public hearing on the city's options for the community center.

"Whatever we do at Cubberley has been lingering out there for decades," Council member Pat Burt, who pushed for more transparency in the discussions, said at the Aug. 21 meeting. "This is going to be a very important decision, hopefully a very positive move forward."

Council member Vicki Veenker noted the difficult "chicken-and-egg" nature of the Cubberley dilemma. The city, she said, has yet to come up with a plan for redeveloping the community center, which makes it hard to know how much land it needs to lease.

"How do you know what land deal to strike until you know what you'll use it for? But how do you know what to build until you know how much land you have?" Veenker asked.

If the council backs the new staff recommendation, much of the work on resolving this dilemma will fall to its Cubberley Ad Hoc Committee, which comprises Mayor Lydia Kou, Burt and Council member Julie Lythcott-Haims. Though the committee was formed last May, it has yet to hold any meetings, according to Meghan Horrigan-Taylor, the city's chief communications officer.

She told this publication that the Oct. 15 meeting is meant to get direction from the full council relating to Cubberley negotiations.

"Additionally, through these full Council discussions, staff has provided the background and current status of Cubberley, and potential options to propose," Horrigan-Taylor said in an email. "The upcoming discussion at Council will provide direction on next steps, and staff has recommended working with the Ad Hoc to more fully develop a proposal to PAUSD."

In addition to signing a ground-lease or swapping land, the council also has the option to outright purchase additional Cubberley land from the school district. While this option would give the city full control of more Cubberley land for an indefinite period of time, it entails numerous complications, including the need to secure a funding source for the purchase and the difficulty of replacing aged infrastructure, especially if the city only controls a portion of the community center, according to staff.

A land swap would also come with constraints, including the need to identify a property to be swapped, the potential loss of dedicated parkland and the need to hold a special election to "undedicated" the parkland if such land is chosen for the trade.

Under the City Charter, the city cannot sell or trade land that is dedicated for the use of park, playground, recreation or conservation purposes without a majority vote of the electorate, according to staff.

The ground lease option also comes with its own uncertainty, particularly if the school district decides at a later date that it needs some of the space that it had relinquished for an additional school or for other purposes. This could be addressed through a lease-back arrangement that would allow the district to reclaim some of its land, including portions of Cubberley that it currently uses for educational purposes, according to city staff.

The new report notes that ground leases are a "very common means to enable capital investment in a property while the property owner retains title to the property." As examples, staff point to the Avenidas building on Bryant Street, Stanford Shopping Center, Stanford Research Park and the Google development in Mountain View.

In making the case for a ground lease, staff note that the mechanism would allow the city to "proceed quickly to assume primary responsibility to improve areas of the Cubberley site without first negotiating new ownership boundaries and land purchase, while also enabling PAUSD to retain its stated interest in retaining ownership."

"A ground lease is the most expedient way to begin the public planning process for improvements of greatest interest to the community," the report states. "Additionally, a ground lease would not require the City to relinquish ownership of other properties within the City that provide community value."