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Publication Date: Friday, January 24, 2003

Council debates clinic's benefits Council debates clinic's benefits (January 24, 2003)

Seeking to move to Emporium site, Medical Foundation is asked to prove it is right tenant

By Candice Shih

In showing interest in the old Emporium site, the Palo Alto Medical Foundation has both appeased the neighbors and perturbed city council members.

Prior to Tuesday night's study session with the council, Foundation representatives convinced several members in the community that they were worth listening to. "Our group's objective is to keep this site on the city's front burner," said Lawrence Vallandigham, who led last year's successful campaign to keep Home Depot off the site.

"I'm supportive because they came out early and talked to us," said Mountain View resident Julie Muir.

But the Foundation's ability to sway local activists did not work with all of the council members. Because the site is not zoned for a healthcare facility, council approval is required for the project.

Council member Rosemary Stasek had been initially concerned that the Foundation would not generate any significant sales tax revenue for the city. In contrast, Home Depot would have brought in $500,000 yearly. And other retail, hotel, or office development would at least generate revenue from other taxes.

But, as a nonprofit and healthcare facility, the Foundation is exempt from most taxes and would only produce a minimum of sales tax revenue.

"I'm not into everything for the revenue," said Stasek. "But this is an organization that is not poor by any means and does not serve the underserved: those with Medi-Cal and the uninsured."

As Foundation representative Richard Slavin pointed out, patients with Medi-Cal health insurance are a financial burden on the company.

"What makes you nonprofit?" asked Council member Greg Perry. "In what sense are you charitable?"

He said he would like to see evidence that the Foundation is a nonprofit for sincere reasons and not just for tax benefits. And Perry said he would be more in support of housing at the Emporium site or a combination of uses that includes housing.

Council member Matt Pear was more cautious and asked the council not to pass judgment. He, Council member Mary Lou Zoglin and Mayor Mike Kasperzak agreed that the city could continue to look into the proposal and the potential land use change, while Council member Nick Galiotto asked if the Foundation would consider reimbursing the city for the staff time that the proposal requires.

Slavin said he is very optimistic about the future of the plan and is willing to consider alternatives that would fit the city's needs. Although the Foundation cannot generate significant revenue for the city, it might be able to reduce its expenses by providing services for city employees, for example.

The Foundation, which has a branch in Palo Alto, is interested in centralizing Mountain View and Sunnyvale members of its Camino Medical Group in a new building at the Emporium site. It plans on employing about 650 people and servicing 1,500 patients a day in a minimum 200,000 square-foot space.

Foundation officials found the old Emporium site advantageous because of its high visibility location on El Camino Real. In addition, highways 85 and 237 run near it and a public bus line passes by it.

The council is scheduled to vote on whether to have city staff work on the Palo Alto Medical Foundation's proposal at the Feb. 11 meeting.

Samay Gheewala contributed to this report

E-mail Candice Shih at


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