Palo Alto; Measure O

	Palo Alto; Measure O

"Shall a City Council-approved ordinance be adopted approving an agreement
betwen the City of Palo Alto and Stanford Universoty to permit:
Construction of apartments, senior housing and care facilities; Stanford
Shopping Center expansion and parking; a two-lane extension of Sand Hill
Road to El Camino Real, with four lanes west of Arboretum Road at Stanford's
expense; annexing land for housing; development restrictions on certain
Stanford lands adjacent to Sand Hill Road until 2021; and $1.00 per year
leases for a child care center and El Camino Park?"

RESOLUTION NO. 7705
RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO
CALLING A SPECIAL ELECTION FOR TUESDAY, NOVEMBER 4,
1997, FOR SUBMITTAL OF A REFERENDUM MEASURE TO THE
ELECTORATE AND ORDERING CONSOLIDATION OF SAID
ELECTION

WHEREAS, by Resolution No. 7679, the City Council has called a general
municipal election for the election of Council Members for November 4, 1997, pursuant to
Article III, Section 3, and ordered consolidation of said election; and

WHEREAS, the City Council wishes to submit its action approving a
development agreement between the Board of Trustees of the Leland Stanford Junior
University and City of Palo Alto to the voters for a referendum, on its own motion, in
accordance with the requirements of Article VI, section 3 of the Charter of the City of Palo
Alto; and

WHEREAS, elections are scheduled to be held on November 4, 1997, in certain
school districts and certain special districts in Santa Clara County; and

WHEREAS, pursuant to Education Code Section 5342 and Part 3 of Division
10 of the Elections Code, commencing at Section 10400, such elections may be partially
or completely consolidated.

NOW, THEREFORE, the Council of the City of Palo Alto does RESOLVE as
follows:

SECTION 1. Pursuant to Article VI, Section 2 of the Charter of the City of Palo
Alto, this Council submits to the electorate of the City of Palo Alto the following question:

CITY OF PALO ALTO REFERENDUM MEASURE O

Shall a City Council-approved ordinance be adopted approving
an agreement between the City of Palo Alto and Stanford
University to permit: Construction of apartments, senior
housing and care facilities; Stanford Shopping Center
expansion and parking; a two-lane extension of Sand Hill Road
to El Camino Real, with four lanes west of Arboretum Road at
Stanford's expense; annexing land for housing; development
restrictions on certain Stanford lands adjacent to Sand Hill
Road until 2021; and $1.00 per year leases for a child care
center and El Camino Park.

If a majority of qualified electors voting on such measure shall vote in favor of City of
Palo Alto Referendum Measure O, it shall be deemed ratified and shall read as provided
in Exhibit "A" attached hereto.

SECTION 2. The Council of the City of Palo Alto requests the Governing Body
of any such other political subdivision, or any officers otherwise authorized by law, to
partially or completely consolidate such elections and to further provide that the canvass
be made by any body or official authorized by law to canvass the returns of the election,
except that in accordance with Article III, Section 4, of the Palo Alto Charter, the City
Council must meet and declare the results of said elections; and that this City Council
consents to such consolidation.

SECTION 3. Pursuant to Section 10002 of the California Elections Code, the
Council of the City of Palo Alto hereby requests the Board of Supervisors of Santa Clara
County to permit the Registrar of Voters to render services to the City of Palo Alto relating
to the conduct of Palo Alto's General Municipal and Special Elections which are called to
be held on Tuesday, November 4, 1997.

The services shall be of the type normally performed by the Registrar of Voters
in assisting the clerks of municipalities in the conduct of elections including, but not limited
to, checking registrations, mailing ballots, hiring election officers and arranging for polling
places, receiving absent voter ballot applications, mailing and receiving absent voter ballots
and opening and counting same, providing and distributing election supplies, and
furnishing votomatic machines.

Subject to approval of the Board of Supervisors of Santa Clara County of the
foregoing request, the City Clerk is hereby authorized to engage the services of the
Registrar of Voters of the County of Santa Clara to aid in the conduct of said elections
including canvassing the returns of said election. Further, the Director of Administrative
Services is authorized and directed to pay the cost of said services provided that no
payment shall be made for services which the Registrar of Voters is otherwise required by
law to perform.

The City Clerk is directed to submit a certified copy of this resolution to the
Board of Supervisors of the County of Santa Clara.

SECTION 4. The City Clerk is directed to do all things requested by law to
present the measure to the electorate, including required publication and noticing. Further,
the City Clerk is directed to forward a copy of this resolution to the City Attorney for
preparation of an impartial analysis of the above measure.

SECTION 5. The Council finds that this resolution does not constitute a project
subject to the California Environmental Quality Act.

INTRODUCED AND PASSED: August 4, 1997

AYES: Andersen, Eakins, Fazzino, Huber, Kniss, McCown, Rosenbaum, Wheeler

NOES:

ABSTENTIONS:

ABSENT: Schneider

ATTEST:
Gloria L. Young
City Clerk

APPROVED:
Joseph H. Huber
Mayor

APPROVED AS TO FORM:
Ariel Pierre Calonne
City Attorney

June Fleming
City Manager

Melissa O. Cavallo
Acting Director of Administrative Services

BALLOT SUMMARY

The following statement is an impartial summary of the Palo Alto City Council's actions unanimously
approving a development agreement Between the City of Palo Alto and the Board of Trustees of the
Leland Stanford Junior University relating to development proposals by Stanford University for the
Sand Hill Road Corridor.

The City Council decided to submit its actions to the voters for approval or disapproval via the
referendum process.

This summary is authorized by Palo Alto Municipal Code section 2.40.035 because the full text of
the measure exceeds fifty (50) pages.

July 31, 1997
Respectfully submitted,
ARIEL PIERRE CALONNE
City Attorney
City of Palo Alto

This summary is organized into the following sections.

What Is Before the Voters

Brief Summary of the Measure

Full Text of the Development Agreement Approval Ordinance

Summary of the Development Agreement

Summary of the Projects Approved by the Development Agreement

1. WHAT IS BEFORE THE VOTERS

This City Council-sponsored referendum asks Palo Alto voters whether to approve or disapprove a
development agreement between the City and Stanford University. A "development agreement"
("Agreement") is a contract, approved by ordinance, that authorizes and controls building projects
under Palo Alto's planning and zoning laws.

A "YES" vote will approve the Agreement and related development approvals. Stanford University
will be authorized to begin construction of certain development projects in the Sand Hill Road
corridor.

A "NO" vote will reject the Agreement and related approvals. Stanford University will not be
authorized to begin construction of certain development projects in the Sand Hill Road Corridor.

2. BRIEF SUMMARY OF THE MEASURE

The City Council action before the voters is an ordinance approving the Agreement. This action
incorporates numerous planning and zoning approvals. The City Council has made all of the
planning and zoning approvals contingent upon voter approval of the Agreement. If approved,
Stanford University will have the right to build several projects in the Sand Hill Road Corridor. If the
Agreement is disapproved by the voters, none of the planning and zoning approvals will become
effective.

The Agreement is valid for fifteen years. The Agreement will prevent the City Council or voters from
changing the applicable planning and zoning laws during this period. In exchange, the Agreement
binds Stanford to provide certain extraordinary financial and other public benefits to the City.

In summary, the Agreement approves the following:

Stanford may build the following projects in the Sand Hill Road corridor:

628 apartments;

388 independent living condominiums for senior citizens;

66 assisted living units for senior citizens;

47 skilled nursing rooms for senior citizens;

80,000 square feet of commercial space and one additional parking structure
at
the Stanford Shopping Center;

A widened, four-lane Sand Hill Road from San Francisquito Creek to Arboretum
Road. Widening the portion from San Francisquito Creek to Santa Cruz Avenue
is subject to the approval of the City of Menlo Park;

A two-lane extension of Sand Hill Road from Arboretum Road to El Camino
Real.

Stanford must do the following:

Provide road and utility easements to the City without charge;

Reserve and rent 15% of the housing units at controlled rates for low and
moderate income households. The number of reserved units escalates to
15%
over the first ten years of the project, and must be maintained for a total
of 59 years;

Comply with an apartment management plan that provides rental priority for
Stanford employees and others working on Stanford lands;

Pay the cost of specified City-retained expert consultants to assure compliance
with public works, utilities, archaeological, environmental and other conditions
of approval;

Cooperate with the City to annex into Palo Alto a 2.5 acre parcel created by the
realignment of Pasteur Drive, which is pre-zoned for housing use;

Designate Palo Alto as the sales tax recipient for construction materials and
fixtures used for the projects;

Restructure, and extend to 2033, the City's lease of El Camino Park and
neighboring properties, and reduce the City's lease payments to Stanford to
$1.00 per year;

Lease for $1.00 per year a one-half acre site within the apartment project for
child care purposes, and operate a child care center on the site if no other
provider will do so;

Restrict development until 2021 on an 139 acre parcel south of Sand Hill Road;

Pay all attorney's fees and costs incurred by the City as a result of litigation
against the Agreement or any aspect of the projects;

Comply with all environmental mitigation measures and other conditions of
approval applicable to the projects.

Construct the road improvements approved as 96-ARB-92, including the Sand
Hill Road Extension.

The City will:

Permit these projects;

Not change any applicable zoning or planning laws for the term of the
Agreement, via City Council action, citizen initiative, or otherwise, unless the
change is necessary to protect against demonstrable risks to health and safety;

Not require any additional payments, dedications or contributions by Stanford
in connection with the projects approved by the Agreement, unless necessary
to protect against demonstrable risks to health and safety;

Review Stanford's compliance with the Agreement on an annual basis;

Not be liable for money damages to Stanford in the event the City defaults on
the Agreement. In general, Stanford's legal remedy should the City default will
be to seek court-ordered performance by the City of its obligations under the
Agreement.

In addition to the Agreement summarized above, the ordinance approving the Agreement provides
that if a competing initiative measure appearing on the same ballot receives more votes than the
Agreement, then the Agreement shall not become effective. The ordinance also provides that if a
competing initiative measure appearing on the same ballot receives fewer votes, then the competing
initiative shall not become effective.
3. FULL TEXT OF THE DEVELOPMENT AGREEMENT APPROVAL ORDINANCE

The ordinance before the voters is set forth below. The attachments to the ordinance, including the
text of the actual development agreement and planning and zoning approvals, are described in
Sections 4 and 5 of this summary.

ORDINANCE NO. 4433

ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO
APPROVING A DEVELOPMENT AGREEMENT BETWEEN THE
BOARD OF TRUSTEES OF THE LELAND STANFORD JUNIOR
UNIVERSITY AND THE CITY OF PALO ALTO

The Council of the City of Palo Alto does ORDAIN as follows:

SECTION 1.

A. A development agreement has been requested of the City for the approval of
development of certain real property collectively known as Stanford Sand Hill Road Corridor
Projects, and more particularly described in the subject Development Agreement.

B. The City Council finds and determines that notice of intention to consider the
development agreement has been given pursuant to Government Code section 65867.

C. The Planning Commission and the City Council have each conducted a public
hearing on the Development Agreement, amendments to the Palo Alto Comprehensive Plan and
Zoning Ordinance, a Tentative Map, and various related land use approvals.

D. The City Council has reviewed the contents of the Environmental Impact Report
("EIR") prepared for the Projects, and all other relevant information, including staff reports, and all
testimony, written and oral, presented on the matter.

E. The City Council finds and determines that the development agreement is
consistent with the Comprehensive Plan of the City of Palo Alto, as amended. The City Council has
specifically considered the regional welfare and the impacts of the development agreement upon
the regional welfare. The City Council finds and determines that the benefits of the project set forth
in the development agreement, and findings including statements of overriding consideration for
each project, establish the reasonable relationship of the Projects and of the approvals to the
regional welfare.

SECTION 2. The City Council hereby approves the Development Agreement between
the Board of Trustees of the Leland Stanford Junior University and the City of Palo Alto, a copy of
which is attached hereto as Exhibit "A", and authorizes the Mayor to execute the agreement on
behalf of the City.

SECTION 3. The City Clerk is directed to cause a copy of the development agreement
to be recorded with the County Recorder not later than ten (10) days after it becomes effective.

SECTION 4. The City Council adopts this ordinance in accordance with the California
Environmental Quality Act ("CEQA") findings adopted by Resolution No. 7685.

SECTION 5. This ordinance shall be effective upon the thirty-first (31st) day after its
adoption but, if submitted to a referendum by the Council on its own motion, or by a certified
sufficient petition of the electorate, pursuant to Article IV, section 3 of the Charter, it shall be
suspended and inoperative unless and until it is approved by the voters. If an initiative appearing
on the same ballot with this ordinance amends one or more of the same provisions of the Palo Alto
Comprehensive Plan or Zoning Ordinance as this ordinance or any actions incorporated into the
development agreement, and both this ordinance and the initiative are approved, but the ordinance
receives fewer votes than the initiative, a direct and irreconcilable conflict with the entirety of this
ordinance shall be deemed to exist, and no part of this ordinance or any actions incorporated into
the development agreement shall become finally effective.

If an initiative appearing on the same ballot with this ordinance amends one or more of
the same provisions of the Palo Alto Comprehensive Plan or Zoning Ordinance as this ordinance
or any actions incorporated into the development agreement, and both this ordinance and the
initiative are approved, but the initiative receives fewer votes than this ordinance, a direct,
irreconcilable conflict with the entirety of the initiative shall be deemed to exist, and no part of the
initiative shall become effective.

INTRODUCED: June 30, 1997
PASSED: July 14, 1997
AYES: ANDERSEN, EAKINS, HUBER, KNISS, MCCOWN, ROSENBAUM, SCHNEIDER, WHEELER
NOES:
ABSTENTIONS:
ABSENT: FAZZINO

ATTEST:
Gloria L. Young
City Clerk

APPROVED:
Joseph H. Huber
Mayor

APPROVED AS TO FORM:
Susan W. Case
Senior Asst. City Attorney

June Fleming
City Manager

Kenneth R. Schreiber
Director of Planning and
Community Environment

4. SUMMARY OF THE DEVELOPMENT AGREEMENT

This section is a shortened version of the Agreement. It tracks the organization and content of the
Agreement, but is abridged.

Explanation of Key Terms

The Agreement grants Stanford University assurances of the right to build several projects in the
Sand Hill Road Corridor during a fifteen year period. In exchange, Stanford promises to provide
certain financial and other public benefits.

The Agreement refers to the projects collectively as the "Project." The City Council's actions
granting the planning and zoning approvals that are covered by the Agreement are referred to
collectively as the "Project Approvals."

The basic assurance of Stanford's right to build is provided by a City promise not to change the
"Applicable Rules" for the Project. "Applicable Rules" means the City's planning and zoning rules
as of June 30, 1997.

New or changed planning and zoning rules, referred to as "Subsequent Applicable Rules," are
applicable only if the City determines it necessary to protect against conditions which create a
substantial and demonstrable risk to the physical health or safety of residents or users of the Project
or the affected surrounding region.

The Stanford-owned land upon which the Project can be built is called the "Property."

Abridged Development Agreement Text

THIS DEVELOPMENT AGREEMENT is entered into as of this 14th day of August,
1997, by and between the CITY OF PALO ALTO and THE BOARD OF TRUSTEES OF THE
LELAND STANFORD JUNIOR UNIVERSITY.

FACT RECITALS

Stanford has applied for, and the City has certified or approved, as applicable, certain environmental
documents and land use approvals and entitlements relating to the development of the Project.
These actions (the "Project Approvals") consist of the following: (Section 5 of this Summary
describes these actions.)

CEQA Compliance.

1997 Comprehensive Plan Amendments.

1997 Zoning Ordinance Amendments.

1997 Tentative Map.

Other Approvals and Entitlements.

Conditions of Approval.

This Agreement is consistent with the present public health, safety and welfare needs of the
residents of the City of Palo Alto and the surrounding region. City has approved the Project and
granted the entitlements after considering the impacts and benefits of the Project upon the health,
safety and welfare of the City and the region. City has also determined that the Project, as
conditioned and modified, represents a reasonable balancing of the competing interests of the
affected region.

This Agreement will bind future City Councils to the terms and obligations specified in this
Agreement and limit, to the degree specified in this Agreement and under state law, the future
exercise of City's ability to preclude development on the Property.

This Agreement will eliminate uncertainty in planning and provide for the orderly development of the
Property, eliminate uncertainty about the validity of exactions imposed by City, allow installation of
necessary improvements, provide for public services appropriate to the development of the Project,
and generally serve the public interest, both within the City of Palo Alto and in the surrounding
region.

Development of the Project in accordance with this Agreement and the Approvals will provide for
orderly development consistent with City's Comprehensive Plan. The terms and conditions of this
Agreement have undergone extensive review by City staff, its Planning Commission and the City
Council, and have been found to be fair, just and reasonable. Specifically, the Planning Commission
and the City Council have found that:

The provisions of this Agreement and its purposes are consistent with the goals,
policies, programs and standards specified in City's Comprehensive Plan;

This Agreement will help attain important economic, social, environmental and
planning goals of City and enhances and protects the public health, safety and welfare of the
residents of the City of Palo Alto and the surrounding region.

Stanford will incur substantial costs in providing public improvements, facilities and
services for the benefit of the public in excess of that required to address the impacts of the Project;

This Agreement will mitigate significant environmental impacts; and

This Agreement will otherwise achieve the goals and purposes for which the
Development Agreement Act was enacted.

NOW, THEREFORE, the parties do hereby agree as follows:

TERMS OF AGREEMENT

SECTION 1. Definitions.
Section 1 of the Agreement defines several terms.

SECTION 2. Interest of Stanford.
Section 2 contains Stanford's representation that it owns the Property in fee, subject only to
encumbrances, easements, covenants, conditions, restrictions and other matters of record.

SECTION 3. Binding Effect.
Section 3 provides that the Agreement shall run with the land and shall be binding upon any
successors to Palo Alto or Stanford.

SECTION 4. Negation of Agency.
Section 4 disclaims any agency or joint venture relationship between Palo Alto and Stanford.

SECTION 5. Development of the Property.
Section 5 sets forth restrictions on the use and development of the Property:

Permitted Uses. The Property may be used as set forth in the Applicable Rules, Project
Approvals and this Agreement.

Maximum Density and Intensity of Uses. When developed, the density and intensity of
use of the Property shall not exceed those densities and intensities of use set forth in the Applicable
Rules, Project Approvals and this Agreement.

Dedication of Property for Public Purposes. Provisions for the dedication of land for public
purposes are set forth in Section 6 below.

Other Development Standards. All design and development standards not set forth in the
Project Approvals or this Agreement shall be in accordance with the Applicable Rules as applied to
the project through the applicable zoning and other future actions taken by City; provided such
standards shall not be inconsistent with the Project Approvals.

Subsequent Applicable Rules. A Subsequent Applicable Rule can be applied to the
Project without Stanford's consent only if City determines it necessary to protect against conditions
which create a substantial and demonstrable risk to the physical health or safety of residents or
users of the Project or the affected surrounding region.

SECTION 6. Dedications, Exactions, Mitigations and Reservations.
Section 6 requires Stanford to make the dedications, exactions, mitigations or reservations required
by the Project Approvals and Applicable Rules, and all real property conveyances, encumbrances,
or other contracts of any kind shall be in a form acceptable to the City Attorney.

Easements.

Apartment Project. Necessary easements to serve the Apartment Project for
electric, water, gas, wastewater and storm drain purposes; an easement or easements for purposes
of bicycle and pedestrian access on "Main" Street and between the existing bike/pedestrian bridge
at San Mateo Avenue and the Project; necessary easements to serve the Apartment Project for
emergency vehicle access; and other dedications per subdivision approval, as all such easements
are described in the 1997 Tentative Map and Project Approvals.

Senior Project. Necessary easements to
serve the Senior Project for electric, water, gas, wastewater and storm drain purposes; an access
and maintenance easement in favor of the Santa Clara Valley Water District; necessary easements
to serve the Senior Project for emergency vehicle access; and bike paths, as all such easements
are described in the 1997 Tentative Map and Project Approvals.

Shopping Center Project. Necessary easements to serve the Shopping Center
for electric, water, gas, wastewater and storm drain purposes, as all such easements are described
in the Project Approvals

Roadway Easements. Easements for right-of-way purposes for all public streets;
necessary easements for traffic signal control; necessary easements for electric, water, gas,
wastewater and storm drain purposes; easement for utility vehicle access to, and reasonable
clearance around, the utility substation on Quarry Road; and public transit easements, as all such
easements are described in the 1997 Tentative Map and the Conditions of Approval.

Below-Market-Rate ("BMR") Housing Requirement. Stanford shall make certain units in
the Apartment Project available for leasing at below-market rental rates (the "BMR Program") to fulfill
its obligations under Program 13 of the Housing Element of the Comprehensive Plan with respect
to both the Apartment Project and the Senior Housing Project.

Apartment Rental Management Plan. Stanford shall prepare and submit an Apartment
Rental Management Plan for the apartment project which shall provide that priority for the units shall
be given to Stanford employees and persons working on Stanford lands.

The Apartment Rental Management Plan shall be in effect for the duration of the project,
and shall survive the term of this Agreement.

City-Retained Experts. Several Conditions of Approval for the Project require the exercise
of highly specialized technical skills or professional judgment by City, and in order to fulfill these
obligations City will be required to retain professional experts as consultants or contractors. Stanford
shall pay the total costs incurred by City in contracting for the services of certain third party
professional experts in connection with construction of the Project as required by the Conditions of
Approval.

Required Consultants. The City Consultants that Stanford shall be required to fund
are listed below.

Arborist.

Creek Restoration Specialist.

Archaeologist/Historian.

Senior Level Planner.

Building Plan Checker and Inspector.

Electric Utility Engineer/Inspector.

Public Works Engineer/Inspector.

Hydrologist.

Annexations. City shall petition the Local Agency Formation Commission to annex to City
the unincorporated island that will be created by the relocation of Pasteur Drive at Sand Hill Road.
Stanford agrees that it will not oppose the annexation and that it will cooperate.

Designation of Job Site for Sales and Use Tax Purposes. Stanford shall designate and
shall require its contractors and subcontractors to designate the Property as the place of sale of
"fixtures" furnished and installed by them for the Project, and also to designate and require its
contractors and subcontractors to designate the Property as the place of use of "materials" used in
construction of the Project.

El Camino Park. City leases land from Stanford along El Camino Real that is improved
with El Camino Park facilities, and other recreational and commercial facilities (collectively, the
"Current Lease"). The parties shall amend the Current Lease:

to define the premises leased to the City to include only (1) those portions of the
Current Lease premises that are now dedicated for park purposes, pursuant to,
and as described in, Section 22.08.230 (the "park") and (2) that portion of the
Current Lease premises which includes the train depot lease area (the "depot").
The amendment is hereinafter referred to as the "Amended Lease;"
to extend the term of the Amended Lease to June 30, 2033;
with respect to the park, to reduce the rent under the Amended Lease to $1.00 per
year; and

with respect to the depot, to continue under the same terms and conditions as the
Current Lease, provided, that City shall have the right to terminate the depot lease
on February 26, 2013.

The Amended Lease will be effective as of the date Stanford is issued the first
building permit for either the Apartment project or the Senior Housing project.

To effect the purpose of this provision, City shall assign to Stanford any subleases
it now has with respect to that property under the Current Lease which will not be included in the
Amended Lease, and Stanford agrees to accept such assignments.

Child Care. Stanford will lease to a qualified child care provider, at a rent of $1.00 per
year, an approximately one-half acre parcel on the Stanford West site between the Village Green
and Governor's Lane, for the purpose of constructing and operating a child care facility, subject to
obtaining all required permits.

In the event that Stanford is unable to find a provider willing to construct the facility,
Stanford shall construct it prior to the opening of the final phase of the Stanford West Apartments.
If Stanford is unable to find a provider willing to operate the facility, Stanford shall operate it.

This provision shall be in effect for the duration of the project, and shall survive the
term of this Agreement.

Sand Hill Corridor Future Development. Until December 31, 2020, Stanford shall not
develop the approximately 139-acre parcel known as Special Condition Area "B," as defined in the
1989 General Use Permit, except for academic and recreational fields (including the golf course) and
associated support facilities; provided, it may propose Stanford University faculty, staff or student
housing in that part of Area "B" east of Fremont Road.

No Other Dedications. Stanford shall not be required to make any other dedications or
reservations of the Property, or any portion thereof or interest therein, or of any other property in
connection with the development, construction, use, or operation of the Project, or any portion
thereof.

No Other Public Improvements or Financial Contributions. Stanford shall not be required
to construct public improvements or make financial contributions to City in lieu of public
improvements, except as expressly set forth in this Agreement.

SECTION 7. Phasing Schedule.
Section 7 requires Stanford to construct the Project and comply with the Conditions of Approval,
including the requirements of Section 6 of this Agreement, in accordance with the schedule.

SECTION 8. Conditions and Impositions.
Section 8 requires Stanford to comply with the following conditions and impositions in connection
with subdivision and development of the Property:

Comply with all Project Approvals and Conditions of Approval;
Complete any action deemed necessary pursuant to Section 9 below.
Construct the road improvements approved as 96-ARB-92.

SECTION 9. Agreement and Assurances.
Section 9 establishes the City's assurances of Stanford's right to build the Project.

Entitlement to Develop. As of the Effective Date, Stanford has acquired and been
granted the vested right to develop the Project to the extent and in the manner provided in this
Agreement, subject to the Conditions of Approval imposed by the Project Approvals and in accordance
with the Applicable Rules and Subsequent Applicable Rules when required by this
Agreement, and City hereby finds the Project consistent with the Comprehensive Plan and the
Zoning Ordinance.

Any change in the Applicable Rules, including, without limitation, any change in any
applicable general or specific plan, zoning, subdivision or building ordinance or regulation, adopted
or becoming effective on or after the Effective Date including, without limitation, any such change
by means of ordinance, initiative, referendum, resolution, policy, order or moratorium, initiated or
instituted for any reason whatsoever and adopted by the Mayor, City Council, Planning Commission
or any other board, commission or department of City, or any officer or employee thereof, or by the
electorate, as the case may be, which would, absent this Agreement, otherwise be applicable to the
Project and which would conflict in any way with or be more restrictive than the Applicable Rules,
shall not be applied by City to the Project without Stanford's consent unless City determines it
necessary to protect against conditions which create a substantial and demonstrable risk to the
physical health or safety of residents or users of the Project or the affected surrounding region. Any
Subsequent Applicable Rule can be applied to the Project without Stanford's consent only if City
determines it necessary to protect against conditions which create a substantial and demonstrable
risk to the physical health or safety of residents or users of the Project or the affected surrounding
region.

SECTION 10. Periodic Review of Compliance.
Section 10 requires the City to review this Agreement annually, on or before the anniversary of the
Effective Date, in accordance with the procedures and standards set forth in this Agreement.

Special Review. The City Council of City may order a special review of compliance with
this Agreement at any time. The Director of Planning and Community Environment or City Council,
as determined from time to time by the City Council, shall conduct such special reviews.

Certificate of Compliance. If, at the conclusion of a periodic or special review, Stanford
is found to be in compliance with this Agreement, City shall, upon request by Stanford, issue a
Certificate of Compliance to Stanford.

SECTION 11. Modification, Amendment or Cancellation.
Section 11 provides that the Agreement may be modified or amended from time to time by mutual
consent of the parties or their successors in interest.

SECTION 12. Remedies for Default.
Section 12 acknowledges that the City would not have entered into this Agreement if it were to have
liability in damages under this Agreement, or with respect to this Agreement or the application
thereof. The parties intend by the provisions of this Section 12 that City shall have no liability for
damages arising out of a breach of this Agreement.

SECTION 13. Litigation Expenses.
Section 13 provides that if a legal action or proceeding is brought by any party because of default
under this Agreement, or to enforce a provision thereof, the prevailing party therein shall be entitled,
in addition to any other relief, to recover reasonable attorneys' fees and court costs from the losing
party as determined by the court in which said action or proceeding is pending.

SECTION 14. Superseding State or Federal Law.
Section 12 provides that if any state or federal law or regulation enacted or adopted after the date
of this Agreement shall prevent or preclude compliance with any of the provisions hereof, such
provisions shall be modified or suspended only to the extent and for the time necessary to achieve
compliance with said law or regulation and the remaining provisions of this Agreement shall be in
full force and effect.

SECTION 15. Hold Harmless.
Section 15 provides that Stanford and the City agree to hold each other harmless from liability for
actions arising out of the other party's conduct.

In addition to the foregoing, Stanford agrees to pay all costs, expenses, resultant charges,
and damages, including but not limited to attorney's fees, incurred by or imposed upon City as a
result of any litigation attacking this Agreement or any aspect of the Project.

SECTION 16. Notices.
Section 16 specifies the manner in which any notice required by the Agreement must be provided

SECTION 17. Term of Agreement.
Section 17 provides that the term of the Agreement shall commence on August 14, 1997 and shall
continue for fifteen (15) years from the Effective Date or until earlier terminated by mutual consent
of the parties or as otherwise provided by this Agreement. Certain terms of the Agreement are set
forth as surviving beyond the term.

SECTION 18. Miscellaneous.
Section 18 sets forth miscellaneous procedural and interpretive provisions of the Agreement.

Severability. If any term, provision, covenant or condition of this Agreement shall be
determined invalid, void, or unenforceable, the remainder of this Agreement shall not be affected
to the extent the remaining provisions are not rendered impractical to perform taking into
consideration the purposes of this Agreement.

Recordation. Upon execution of this Agreement, City shall promptly arrange for its
recordation.

Captions and References. The captions of the Sections and subsections of this
Agreement are solely for convenience of reference, and shall be disregarded in the construction and
interpretation of this Agreement.

Time. Time is of the essence of this Agreement

Assignment.

Right to Assign. Stanford shall have the right to sell, transfer or assign the Property
with the prior written consent of the City Council which consent may not be unreasonably withheld.

Release of Stanford. Notwithstanding any sale, transfer or assignment, Stanford
shall continue to be obligated under this Agreement unless Stanford is given a release in writing by
City, which release will be provided by City upon the full satisfaction by Stanford of certain
conditions.

Waiver. No waiver of any provision of this Agreement shall be effective unless in writing
and signed by a duly authorized representative of the party against whom enforcement of a waiver
is sought.

Governing State Law. This Agreement shall be construed in accordance with the laws of
the State of California.

Force Majeure. Neither party shall be deemed to be in default where failure or delay in
performance of any of its obligations under this Agreement is caused by floods, earthquakes, other
Acts of God, fires, wars, riots or similar hostilities, strikes and other labor difficulties beyond the
party's control (including the party's employment force), court actions (such as restraining order or
injunctions), or other causes beyond the party's control. If any such events shall occur, the term of
this Agreement and the time for performance by either party of any of its obligations hereunder shall
be extended for the period of time that such events prevented such performance.

Exhibits. The following exhibits to which reference is made in this Agreement are deemed
incorporated herein in their entirety:

Exhibit A - Real Property Legal Description
Exhibit B - CEQA Findings

Exhibit C - Comprehensive Plan Amendments
Exhibit D - Zoning Ordinance Amendments
Exhibit E - Conditions of Approval
Exhibit F - Project Description
Exhibit G - BMR Letter of Agreement
Exhibit H-1 - Apartment Rental Management Plan
Exhibit H-2 - El Camino Park Current and Amended Lease Area
Map and Train Depot Lease Area Legal Description
Exhibit H-3 - Special Condition Area "B"
Exhibit I - Phasing Schedule
Exhibit J - Development Agreement Ord. No. 4433

Referendum. If the Ordinance approving this Agreement is submitted to a referendum by
the City Council on its own motion or by a certified sufficient petition of the electorate, pursuant to
Article VI, section 3 of the Charter of the City of Palo Alto, the Ordinance shall be suspended and
inoperative until approved by the voters.

IN WITNESS WHEREOF, this Agreement has been executed by the parties as of
the day and year first above written.

5. SUMMARY OF THE PROJECTS APPROVED BY THE DEVELOPMENT AGREEMENT

The following list describes the planning and zoning approvals which are part of the Agreement. The
relevant maps are included below.

1997 Comprehensive Plan Amendments.

a. Resolution No. 7687, Amending the Land Use Element of the Palo Alto
Comprehensive Plan Relating to the Streamside Open Space Land Use Category

b. Resolution No. 7686, Amending the Land Use Map of the Palo Alto
Comprehensive Plan for Lands of Stanford University Located Generally at 1000 Sand Hill Road
(Stanford West Apartment Project)

c. Resolution No. 7689, Amending the Land Use Map of the Palo Alto
Comprehensive Plan for Lands of Stanford University Located at 600 and 700 Sand Hill Road
(Stanford West Senior Project)

d. Resolution No. 7690, Amending the Land Use Map and the Street Network Map
of the Palo Alto Comprehensive Plan Relating to Roadway and Circulation Changes and Changes
in the Boundaries of the Streamside Open Space Area in the Vicinity of the Stanford Shopping
Center

e. Resolution No. 7688, Amending Various Elements of the Palo Alto
Comprehensive Plan Relating to Road Improvements in the Sand Hill Road Corridor

1997 Zoning Ordinance Amendments.

a. Ordinance No. 4430, Amending Section 20.08.020 (The Setback Map) of the
Palo Alto Municipal Code to Change the Setback Line Along a Portion of Sand Hill Road

b. Ordinance No. 4426, Amending Section 18.08.040 of the Palo Alto Municipal
Code (The Zoning Map) to Change the Classification of Property Known as 600 Sand Hill Road and
a Portion of 1000 Sand Hill Road from PF to PC and from RM-30 to PC, Respectively (Stanford
West Senior Housing)

c. Ordinance No. 4427, Amending Section 18.08.040 of the Palo Alto Municipal
Code (The Zoning Map) to Change the Zone Classification of Property Located at 600, 700 and
1000 Sand Hill Road from RM-30 to PF and from PF to RM-30

d. Ordinance No. 4428, Amending Section 18.43.050 of the Palo Alto Municipal
Code (Community Commercial District Site Development Regulations), Relating to the Allowable
Floor Area of the Stanford Shopping Center

e. Ordinance No. 4429, Amending Section 18.08.040 of the Palo Alto Municipal
Code (The Zoning Map) to Change the Zone Classification of Property Located at 180 El Camino
Real from CC to CC(L) (Stanford Shopping Center)

f. Ordinance No. 4431, Conditionally Amending Section 18.08.040 of the Palo Alto
Municipal Code (The Zoning Map) by Prezoning as RM-40 a Portion of a New Parcel to be Created
by the Realignment of Pasteur Drive and by Prezoning as PF(L) an Area of Land That Will Become
Part of Pasteur Drive.

g. Ordinance No. 4432, Amending Section 18.08.040 of the Palo Alto Municipal
Code (The Zoning Map) to Change the Zone Classification of a Portion of a New Parcel to be
Created by the Realignment of Pasteur Drive at Sand Hill Road from PF(L) to RM-40

1997 Tentative Map.

Other Approvals and Entitlements.

a. Architectural Review approval of the Stanford West Apartments site

b. Design Enhancement Exception to allow less private open space for 28
apartment units than is otherwise required, for the Stanford West Apartments

c. Variance to allow an 18 foot setback on Sand Hill Road for parking spaces and
carports where 25 feet is otherwise required, for the Stanford West Apartments

d. Variance to allow on-street parking where off-street parking is otherwise
required, for the Stanford West Apartments

e. Site and Design approval for the Stanford West Apartments site

f. Design Enhancement Exception to side yard fencing regulations to allow no
solid wall or fence to be provided along the common property line between the Multiple Family (RM)
zoned site and the Planned Community (PC) zoned Senior Housing site

g. Architectural Review approval of the Senior Housing site

h. Architectural Review approval of the Stanford Shopping Center expansion

i. Variance to allow a setback 1-1/2 feet on Arboretum Road for various retail
building where 24 feet is otherwise required, for the Stanford Shopping Center expansion

j. Architectural Review approval for the Roadway Improvements

Conditions of Approval.

THE ABOVE STATEMENT IS AN IMPARTIAL SUMMARY OF ORDINANCE NO.
4433, ENTITLED "ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO
APPROVING A DEVELOPMENT AGREEMENT BETWEEN THE BOARD OF
TRUSTEES OF THE LELAND STANFORD JUNIOR UNIVERSITY AND THE CITY OF
PALO ALTO." IF YOU DESIRE A COPY OF THE ORDINANCE OR MEASURE,
PLEASE CALL THE PALO ALTO CITY CLERK'S OFFICE AT (650) 329-2571 AND
A COPY WILL BE MAILED AT NO COST TO YOU.

RESOLUTION NO. 7686