City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Transportation
Meeting Date: November 3, 2025
Report #:2507-4945
TITLE
Approve a Cost-Sharing Agreement with Stanford University Not-to-Exceed $878,200 for Design and Engineering Services for the Quarry Road Improvements and Transit Center Access Capital Project (PL-16000) and approve budget amendments in the General Fund, Capital Improvement Fund, and the Stanford University Medical Center (SUMC) Fund; CEQA status – statutorily exempt under Pub. Res. Code § 21080(b)(12).
RECOMMENDATION
Staff recommends that the City Council:
1. Approve and authorize the City Manager or designee to execute a cost-sharing agreement with Stanford University not-to-exceed $878,200 for design and engineering services for the Quarry Road Improvements and Transit Center Access capital project (PL-16000); and
2. Amend the Fiscal Year 2026 Budget Appropriation (requires 2/3 approval) for the:
a. Capital Improvement Fund by:
i. Increasing the Transfer in from the Stanford University Medical Center (SUMC) Development Agreement Fund in the amount of $878,200; ii. Increasing the appropriation for the Quarry Road Improvements and Transit Center Access capital project (PL-16000) in the amount of $878,200;
b. General Fund by:
i. Increasing the Transfer in from the Stanford Universal Medical Center (SUMC) Development Agreement fund in the amount of $35,000; ii. Increasing the expense appropriation for other contract services in the Office of Transportation in the amount of $35,000;
c. Stanford University Medical Center (SUMC) Development Agreement Fund by:
i. Increasing the Transfer to the Capital Improvement Fund appropriation in the amount of $878,200;
ii. Increasing the Transfer to the General Fund appropriation in the amount of $35,000; and
iii. Decreasing the Ending Fund Balance for Intermodal Transit in the amount of $913,200.
BACKGROUND
On November 13, 2017, Council adopted the City’s 2030 Comprehensive Plan including Policy T-
3.10 to participate in the design and implementation of comprehensive solutions to traffic problems near Stanford Shopping Center and Stanford Medical Center, and Program T3.10.4 to pursue extension of Quarry Road for transit, pedestrians and bicyclists to access the Palo Alto Transit Center from El Camino Real.
In November 2024, Palo Alto voters passed Measure D, approving the use of a portion of El Camino Park to implement this Comprehensive Plan direction by undedicating a 0.33-acre portion of El Camino Park to create a new transit roadway linking the Palo Alto Transit Center with El Camino Real.
The Quarry Road Transit Connection will allow buses that use the Palo Alto Transit Center to exit directly to El Camino Real at Quarry Road, rather than circling back via University Avenue.
The project will therefore reduce bus travel times and accomplish bicycle and pedestrian safety improvements at the intersection of Quarry Road and El Camino Real.
On June 10, 2024, Council approved a Letter of Intent (LOI) with Stanford University to support this project.1 The LOI outlined responsibilities and actions that each party plans to undertake, including:
Funding, design, and construction of the roadway, with Stanford University contributing up to $4 million for completion of the project, as well as maintenance funding; Extension of the Stanford lease to the City for the playing fields at El Camino Park for an additional ten years through 2052; and,
A longer-term visioning process for the Palo Alto Transit Center that addresses dynamic public spaces, multi-modal transit needs, and community engagement.
The first phase of the project in the first bullet above is addressed by the attached cost-sharing agreement. To address the third bullet, this item also requests funds to support an initiative to begin longer-term visioning at the Transit Center.
ANALYSIS
The ballot measure approved by voters undedicated the parkland required for the project, so the project may now proceed. Due to current staffing resources, the City cannot support a project manager for the Transit Connection at this time, but Stanford has capacity to lead the design phase of the project. The City and Stanford have therefore collaboratively drafted a cost- 1 City Council, June 10, 2024; Agenda Item #12, SR # 2405-3041 https://portal.laserfiche.com/Portal/DocView.aspx?id=73991&repo=r-704298fc&searchid=36b1a674-586a-4542- 984e-b8b20b7c727a
sharing agreement whereby Stanford provides project management services via a contractor through the design and environmental phase. This arrangement avoids project initiation delays and subsequent cost increases. City staff will be assigned to provide project oversight through the design phase.
The attached scope of work (Attachment A) includes environmental clearance and the State- required construction documents needed to build the transit roadway and upgrade the Caltrans-owned intersection of El Camino Real, Quarry Road, and the new transit road. The tentative project schedule in Table 1 assumes a November 1 start date.
Table 1: Project Tasks and Tentative Schedule
Task Timeline
Project Kick-off November 2025
Preliminary Engineering & Supporting Analyses (includes Traffic & Transit Analyses, Encroachment Permit Preparation) November 2025 - May 2026
Environmental Studies & Clearance February 2026 - April 2026 Plans, Specifications & Estimates (PS&E – 60%/95%/Final): February 2026 - January 2027 Draft Design Engineering Evaluation Report (DEER) December 2026 Final DEER June 2027
The total budget for the design phase is $878,200, which also includes a $100,000 contingency and an optional line item for a Caltrans-required Preliminary Environmental Analysis Report for $11,700. The environmental analysis report is currently optional in the event that Federal funds are later added to the project which is currently locally funded.
To address the longer-term interests for the site, the City is partnering with the Valley Transportation Authority (VTA), Stanford University, and the Urban Land Institute (ULI) to obtain advice and recommendations from the Urban Land Institute (ULI) on longer-term development and planning issues associated with the Palo Alto Transit Center. ULI will bring a panel of subject matter experts to interview a wide variety of individuals in Palo Alto. The panel will then develop recommendations for the Palo Alto Transit Center. This intensive short-term engagement with ULI is taking place the week of October 19, 2025. ULI will make a presentation of findings at the end of their engagement. The City’s portion of the $135,000 cost for the ULI initiative is $35,000 (the other partners are each paying $50,000 towards this engagement).
This work is being initiated through the VTA Mobility Hub Ad Hoc Committee, which is looking at ways to transform the second most active train station in the Caltrain corridor into an active transit-friendly hub that enhances visitor experience, supports community engagement, and ensures long-term sustainability.
FISCAL/RESOURCE IMPACT
The preliminary cost estimate to design and build the Quarry Road Transit Connection is estimated to be roughly $5 million but is dependent on ultimate design. These costs will be updated as the design is advanced and construction documents are prepared. The project will be funded by multiple sources, including funding from the Stanford University Medical Center (SUMC) Development Agreement for SUMC Renewal and Replacement Project. Section 5 (d)(i) of the Development Agreement includes $2.25 million for linkages to the intermodal transit station that encourage the use of transit and active transportation modes. A portion of these funds were used previously in the Quarry Road Improvements and Transit Center Access capital project (PL-16000) to build a shared use path between the Transit Center and El Camino Real, resulting in a current fund balance of $1.3 million available for intermodal transit projects. This report recommends using $878,200 of this funding for work in PL-16000. The cost-sharing agreement that is the subject of this report allows the City to transfer the required funds to Stanford to pay for the environmental and advanced preliminary engineering phase of the project.
In July, the Metropolitan Transportation Commission's (MTC's) Regional Network Management Committee approved negotiating and entering into a Master Funding Agreement Supplement with the City of Palo Alto for the Quarry Road Connection Project in an amount not to exceed $1.0 million dollars. Through this supplement, MTC will provide $1.0 million dollars in Regional Measure 2 (RM2) bridge toll revenues, subject to allocations, and with matching funds of $500,000, each provided by the City of Palo Alto and Stanford University to support the project through construction. The City‘s matching funds will be provided via the aforementioned SUMC Development Agreement funds. RM2 funding requires review of the project’s Complete Streets Checklist to ensure engagement by pedestrian and bicycle stakeholders, and this review was completed in August by the Pedestrian and Bicycle Advisory Committee.
To cover the cost of the $878,200 design phase and contract for the Quarry Road Transit Connection, MTC in July approved the initial RM2 allocation of $250,000 for the environmental/advanced preliminary engineering phase. The City and Stanford will each provide $125K in matching funds (the City’s portion sourced from the SUMC Development Agreement Intermodal Fund), with the remaining approximately $400K coming from the SUMC Development Agreement Intermodal Fund. Staff will return to Council at a later date to approve the funding agreement with MTC and recognize and appropriate the funds in PL-16000.
The transit connection project is exempt from competitive procurement per PAMC Section
2.30.360(b)(3).
The effort with ULI has a total cost of $135,000, split between the three parties (Santa Clara Valley Transportation Authority, Stanford University, and the City of Palo Alto). The City’s portion of the costs is $35,000, and this report recommends that this work be funded out of the SUMC Development Agreement Intermodal Fund noted above and transferred to Transportation Planning and Studies, Other Contract Services, within the Office of Transportation operating budget.
STAKEHOLDER ENGAGEMENT
For the Quarry Road connection, while only a simple majority was needed to pass Measure D, the measure garnered 74% voter approval in 2024. The project concept that was advanced in conjunction with the ballot measure was developed through a collaborative process with engagement of Stanford University, City staff, the Council’s Stanford Ad Hoc Committee, the Parks and Recreation Commission, the Pedestrian and Bicycle Advisory Committee (PABAC) and PATC transit operators.
PABAC’s review of the Complete Streets checklist for RM2 funding occurred in August 2025. The project scope of work includes one public meeting to gain feedback from active transportation stakeholders and one working meeting with transit operators to receive input on operational needs.
The ULI Initiative will engage local stakeholders in its process. Also, members of the public can attend the Mobility Hub Ad Hoc Committee at the regular Ad Hoc Committee meetings.
ENVIRONMENTAL REVIEW
The Quarry Road Transit Connection project is exempt from the California Environmental Quality Act (CEQA). The proposed project comes within the statutory exemption for “facility extensions not to exceed four miles in length which are required for the transfer of passengers from or to exclusive public mass transit guideway or busway public transit services.” Pub. Res.
Code § 21080(b)(12). Due to its fixed location, Caltrain qualifies as an “exclusive public mass transit guideway” service. The proposed project would extend the existing transit center facility by approximately 210 feet, through the intersection of Quarry Road and El Camino Real, to facilitate the transfer of passengers to Caltrain, among other public transit services.
The action to fund the ULI initiative is not a project under CEQA as the activity can be seen with certainty to have no significant effect on the environment.3
ATTACHMENTS
Attachment A: Cost-sharing Agreement with Stanford University (including Palo Alto Transit Center Quarry Road Extension Scope of Work)
APPROVED BY:
Ria Hutabarat Lo, Chief Transportation Official
3 CEQA Guidelines 15061(b)(3)