PATTERSON & O’NEILL, PC
235 Montgomery Street, Suite 950
San Francisco, CA 94104
Telephone: (415) 907-9110
Facsimile: (415) 907-7704
www.pattersononeill.com
VIA EMAIL
City of Palo Alto
George Hoyt, Chief Building Official
Planning and Development Services Department
250 Hamilton Ave.
Palo Alto, CA 94301
Re: Notice and Order to Demolish/Deconstruct and Remove Buildings 531 Stanford Avenue
Dear Mr. Hoyt:
The City has issued a Notice and Order to Demolish/Deconstruct and Remove Buildings (“Notice”) to my client regarding the existing buildings at 531 Stanford Avenue. The Notice contains multiple factual and legal inaccuracies, and the purpose of this letter to correct the record and address next steps. The Notice seems to suggest that the owners have been dilatory in addressing the City’s concerns regarding the building. Nothing could be farther from the truth. In many respects, the delays in addressing the building have been caused by the City and its ever- shifting demands.
While my client disagrees that the building meets the requirements under PAMC § 16.40.050(c) that would require the building to be demolished, my client nonetheless does not intend to appeal the Notice at this time because my client shares the City’s desire to remove the building.
First, we must note that the City apparently mailed the Notice to the building at 531 Stanford Avenue, which the City knows is vacant, fenced, and inaccessible. The City did not properly serve the Notice pursuant to the requirements of PAMC § 16.40.060. We appreciate that Elisa Vargas, Building Inspector, confirmed in writing that the 15-day period to appeal the Notice would run from October 29, 2025. Again, my client hopes to avoid an appeal, but reserves the right to do so.
Property History
My clients first become involved in the property 531 Stanford Avenue in 2010, when the property was purchased by Fortune Sun, Inc.
(“Fortune”). This entity took over the existing
Stanford Terrace Inn (“STI”), a well-known hotel that had operated for decades prior to Fortune’s ownership. The STI had a long history of hosting many guests for long-term stays, including faculty members who used STI as their residence, as well as short-term transient guests. In 2018, the building was sold to Aurora Rising, Inc. (“Aurora”), who continued to operate the STI in the same manner.
In the Spring of 2020, as a result of COVID, STI rapidly lost its transient customer base, began to operate at a loss, and was forced to lay off most of its staff. The few customers who remained were non-transient residents, specifically Stanford faculty members and students who continued to reside at the property.
On or about June 18, 2021, the City of Palo Alto sent a letter to the ownership of STI, expressing preliminary interest in purchasing the subject property for possible inclusion in the State’s Project HomeKey program to provide housing for unhoused residents. The City sent similar inquiries in 2022 and sent information regarding affordable housing opportunities again to company’s closed registered business email address.
In May of 2023, ownership contacted the City Manager regarding potential redevelopment of the property for housing, including by submitting two different housing proposals. Ownership also requested that the City include the property in its Housing Element rezoning program. The City failed to include the property in its rezoning program and also failed to provide ownership with the necessary application forms to complete the redevelopment plans.
On February 28, 2024, the City sent a “courtesy notice” of the City’s intention to inspect the STI because an enforcement “investigation” had determined the STI property appeared to be used for long term stays that were not permitted under current regulations – even though the STI had long been used for such purposes and the City had certainly been aware of this well-established use for years. The City’s position was that the hotel use had been abandoned, the property was zoned RM-30, and the City made clear that its preference was for the property to be developed for high density housing. Ownership believes that this particular property had been singled out by the City for disparate treatment, as many other hotels in the City also regularly allow long term stays, yet no investigations have been opened against other properties.
Three days after the Planning Department met with the property management’s legal representative on March 18 to discuss redevelopment options, the City issued a formal Notice of Violation citing numerous violations such as lack of fire sprinklers and alarms, high combustible storage, unpermitted electrical and structural work, corroded plumbing, blocked egress routes, and inoperable elevators. The Notice required immediate fire-watch services by March 22, evacuation of upper floors and numerous corrective actions by March 25, 2024, and warned of possible declarations of substandard conditions, fines, or abatement orders if compliance was not achieved.
After years of cooperative engagement with the City regarding potential redevelopment of the STI property, we believe the owners’ decision not to sell the property to the City or repurpose it in accordance with the City’s preferred high-density housing agenda provoked a campaign of retaliation that ultimately led to the Notice of Violation and the building being deemed uninhabitable. These actions have caused my client significant harm, both monetarily and emotionally. The City has now decided that the building – which just less than three years ago the City wanted to purchase – is so dilapidated and dangerous that it must be demolished in a matter of months.
Findings and Violations
The Notice repeats many of the same findings that were issued in the prior Notice of Violation.
A number of the cited “violations” are inaccurate, immaterial, or grossly overstated, creating the false impression that ownership was a negligent operator rather than a reputable and conscientious business that had long operated a three-star hotel and, during extraordinarily difficult pandemic and post-pandemic years, allowed Stanford faculty and students to reside in quality accommodations at a fraction of market value.
Many of these findings and violations have been addressed or are only relevant to issues of habitability. As the City is well aware, the building is not currently occupied or used for habitation purposes. Thus, it is unclear why these largely erroneous findings have been repeated in the current Notice, except to continue to harass my client and create a false impression that ownership has done nothing to address the building.
For much of the last two years, the City’s position has been that the building cannot be demolished without an approved redevelopment plan. In fact, ownership submitted a demolition permit over a year ago and the City refused to accept it. Ownership has taken several remedial steps to address the purported violations, including, but not limited to, addressing the alleged hazardous materials remediation that the City mandated to “close” the property.
Less than two months ago, the City informed ownership that the City had changed its mind and now wants the building demolished regardless of redevelopment plan. The Notice erroneously suggests that ownership has simply ignored the Notice of Violation over the last year, which is simply false. Ownership has diligently addressed all the actions that the City has requested, including as recently as last month when the City demanded vegetation removal. The only reason the building has not yet been demolished is because the City has until two months ago refused to consider demolition until a redevelopment plan is approved, yet continually stonewalled ownership’s efforts at redevelopment.
Required Remedial Action
1. Deconstruction and Hazmat Closure Permits
The Notice demands that the applicant take immediate steps to submit two applications by November 17, 2025 – giving the applicant approximately three weeks to comply after the City sat on the submitted demolition permit for a year. Both of the City’s demands are flawed.
The City demands that the applicant submit a complete deconstruction permit. First, we again note the applicant submitted a demolition application in October 2024. The City had this application for over a year and never identified any deficiencies. This same exact application was submitted again last month.
Second, the Notice cites to PAMC § 5.24 in support of the City’s demand for deconstruction.
The City’s demand for deconstruction is not authorized by code. Please be advised that PAMC §
5.24.080 clearly states the following:
5.24.080 Exclusions.
The provisions of this chapter shall not apply to the following:
(a) Dangerous Structures. Any building or structure that has been determined to be dangerous, structurally unsafe or otherwise hazardous to human life, and is required to be abated by demolition.
The City has determined that 531 Stanford is a dangerous building that is required to be abated by demolition. The City’s requirement for deconstruction in PAMC § 5.24 clearly does not apply, and we are unaware of any other code basis that would authorize the City to require deconstruction. While ownership will voluntarily recycle and reuse materials as much as possible, deconstruction cannot be legally required.
WE DEMAND THAT YOU CONFIRM DECONSTRUCTION IS NOT REQUIRED BY NOVEMBER 12. If the City fails to confirm by this date, ownership may have no choice but to appeal the Notice on the basis that the City cannot legally require deconstruction of a dangerous building abated by demolition per PAMC § 5.24.080.
Second, we find the City’s demand for a Hazmat Closure Permit puzzling. The applicant has already submitted a Hazmat Closure Permit, which was approved by the City. Much of the remedial action has already been completed. On August 19, 2025, the applicant submitted a permit extension/reactivation request form
to Mike Espeland of the Palo Alto Fire Department. In
short, ownership has already submitted this permit, and it is unclear what further actions the City needs ownership to complete.
1. Building Removal
As noted above, ownership shares the City’s desire to remove the building. However, we believe that the date of May 18, 2026 is unreasonable for several reasons.
First, much of the compliance deadline period (November-May) occurs during the winter months when rain is much more likely. Rain can cause significant delays and can create hazardous conditions during demolition. Ownership would request that the City at least push back the compliance deadline to allow demolition to take place during the dry season.
Second, as the City is aware, currently there is a T-Mobile tower that provides essential 911 communications on the existing building. During our meeting on September 11, 2025 – where the City for the first time stated demolition without redevelopment would be required – City representatives confirmed that they would afford the property owners sufficient time to work with T-Mobile to discuss potential relocation of this equipment. Approximately one month later, the Notice now demands removal with no plan in place and with no regard for this critical safety infrastructure. The City must approve a relocation plan for this equipment prior to demolition.
Third, the owners have already suffered significant financial losses following the pandemic, the liabilities and fines stemming from the City’s enforcement actions, and costs associated with remedial actions. Demolition activities also come with significant costs, and ownership is concerned that a vacant property with no active use will continue to be a magnet for nuisance activities. Ownership submitted an SB 330 application subject to AB 130 on August 19, and the City has failed to carry out its ministerial duties to conduct tribal scoping and process the application. Ownership must be able to put the property to an economically beneficial use following demolition, both to help fund the demolition activities and deter nuisance activities.
Ownership would like to request a meeting with City staff to discuss the timing of demolition, as well as alternatives for the T-mobile tower and post-demolition uses. Potential alternatives include: 1) partial demolition of the building with the equipment being relocated to the remaining portion until the housing development project is approved; 2) a standalone structure for the T- mobile Tower and temporary parking uses until the housing development project is approved; 3) a standalone structure for the T-mobile Tower and temporary storage uses until the housing development project is approved.
Conclusion
The City’s Notice is highly disappointing. After what we thought was a productive meeting on September 11 where the parties agreed to cooperate and communicate on a plan of action, the City unilaterally sends a Notice (to a vacant, fenced building) with an unreasonable timeline, without any attempt to contact the owners or their representatives, and threatening fines and jail time for noncompliance. The City’s surprise Notice is the opposite of a good faith attempt at cooperation.
We hope to avoid an appeal and chart path forward together with the City. However, we need confirmation that the City will provide flexibility and work collaboratively with ownership on the items discussed above. We look forward to resolving the outstanding issues.
V
ery truly yours,
PATTERSON & O’NEILL, PC
_______________________________
Brian O’Neill