After many months of negotiation, the City of Palo Alto and Palo Alto Unified School District (PAUSD) have agreed on the key terms of a new lease agreement for Cubberley Community Center. Palo Alto Pulse explains the financial implications of this agreement for both the school district and the City of Palo Alto.
Where is Cubberley and what’s its history?
Cubberley Community Center, located at 4000 Middlefield Road in south Palo Alto, was Palo Alto’s third high school until it closed in 1979 due to declining enrollment. Cubberley High School had a brief period of national fame when it was the subject of a 1981 TV movie 
called The Wave that portrayed a classroom experiment conducted by history teacher Ron Jones.
Photo credit: Palo Alto History Museum
In 1989, the City of Palo Alto agreed to lease the buildings and fields at Cubberley from PAUSD.
Why does Cubberley matter for PAUSD?
Cubberley brings in $7 million in lease revenue for PAUSD and has been a reliable source of local funding ever since the lease agreement was signed in 1989. If the City of Palo Alto were to stop leasing Cubberley, this revenue stream would dry up.
Why does Cubberley matter for the City of Palo Alto?
Cubberley provides playing fields, recreation spaces and buildings that the City leases out to sports teams, nonprofits, schools and other programs. Notable tenants at Cubberly include ACME Chinese school, several dance schools, Foothill College and Friends of the Palo Alto Library. The lease fees that the City of Palo Alto generates from Cubberley also provide a revenue source for the City’s General Fund.
What’s changing with the new agreement?
1. No more covenant payment: The most important element of the new framework is that the City will no longer pay PAUSD an annual fee of $1.86 million called the ‘covenant not to develop.’ This fee was included in the original agreement to offset the the potential development opportunities of five school sites that PAUSD was considering selling or leasing (including Jordan, Ohlone and JLS).
In recognition that PAUSD’s financial picture is healthier than in 1989 and that three of school sites are now operational, the City will no longer pay this fee to PAUSD but instead put it into a “Property Infrastructure Fund” to help pay for the costs of upgrading the Cubberley site (estimated at over $18m). Although this is a good step over the long term, it does mean a loss of almost $2 million in revenue for PAUSD that has no immediate replacement.
Photo credit: Foothill College
2. Master plan within five years: Another key part of the agreement is that the City of Palo Alto and PAUSD commit to creating a master plan for the long term use and upkeep of the entire 37-acre Cubberley site within the next five years.
3. Share the load for the loss of Foothill College: The final part of the agreement is that PAUSD and the City of Palo Alto will work together to deal with the positive or negative financial implications of Foothill College moving out its 8 acre site at Cubberley, which the school has indicated it may do if it can find another space.
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