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Stanford team answers questions about NYC proposal, process and withdrawal

On Oct. 26, Stanford submitted a proposal to partner with New York City to build an applied sciences and engineering campus that would serve as a catalyst for new companies and jobs. After submitting its proposal, Stanford held extensive negotiations with NYC. Stanford withdrew its application on Dec. 16. In a press release, President John Hennessy said the university and city "could not find a way to realize our mutual goals."

Since that time, NYC has announced that Cornell University, in partnership with Technion of Israel, will build the applied sciences campus on Roosevelt Island.

In the following, members of the StanfordNYC team answer questions about the proposal, the selection and negotiation process and about Stanford's decision to withdraw its application.

What led to Stanford's withdrawal of its New York City proposal?

From the beginning, Stanford expressed an interest in the project with the clear understanding that it had to benefit both Stanford and New York City. 

After submitting our proposal at the end of October, conversations with the city began in late November, responding to questions from the city that sought to clarify some specifics in our proposal. In early December, a group led by President Hennessy, and including The City College of New York (CCNY) President Lisa Coico, Stanford faculty members and other campus officials, went in person to New York to meet with staff from the city's economic development corporation, which issued the request for proposal (RFP).

For the next two weeks, a smaller Stanford team continued with more intensive negotiations with the NYCEDC (the New York City agency in charge of the process) that focused on many issues, including the legal agreements that would need to be reached between the campus and the city. During the negotiation process the city introduced additional requirements that increased the risks and costs for Stanford and decreased the potential benefit.

We were very much hoping for a successful outcome, but it became apparent that there were areas where the city and university were not going to agree. Beyond the academic part of the proposal, the project involved numerous land use, real estate, zoning, construction timetables with significant penalties and other details. In a project of this nature, involving a significant investment by both the city and a much larger investment by the university, both sides need to be willing to accept a certain level of risk. Ultimately, we decided we could not accept the level of risk that the city wanted us to accept.

 

How was the final decision made?

The trustees were briefed on the status of the negotiations and indicated that they were not comfortable with the city's requests and asked us to continue negotiating. Negotiations continued for several more days, and we concluded that we could not reach an agreement with the city that would assure that a Stanford campus in NYC could be successful.

A final decision was made after President Hennessy spoke to Deputy Mayor Bob Steel and Mayor Michael Bloomberg on the morning of Dec. 16.

 

If we had concerns about the city's requests, why did Stanford not withdraw sooner? Why did Stanford let it go so far?

We put forward a very serious proposal and we were hopeful up until the last moment that we might be able to reach agreement with the city.  Some critical new matters were introduced in the process of the negotiations that were not included in the RFP and not known to us before the StanfordNYC bid was submitted at the end of October. We withdrew when we felt that we could not have a partnership with the city of New York that would make this project successful.

 

Did Stanford withdraw because it believed that Cornell was going to win or because Cornell had received a $350 million gift for the New York campus?
 
Neither. Stanford’s withdrawal was the result of our own negotiations and had nothing to do with Cornell’s bid. Prior to our decision, there was no suggestion on the city’s part that Stanford’s bid was not the front-runner in the competition. In fact, all evidence available to us indicated the contrary. In addition, Stanford did not know about Cornell’s $350 million gift until it was announced five hours after our withdrawal. Though these were not factors in our decision, we sincerely congratulate Cornell on their successful proposal and their inspirational gift.

 

Was the Cornell/Technion proposal really "bigger and bolder" than Stanford's, as the city claimed?

We haven't been able to see their proposal in its entirety. What was revealed publicly before the submission and at their press conference sounded very similar in size and scope to the Stanford proposal, in terms of numbers of faculty, students, building size and square footage. Our construction timelines were also similar. Both projects proposed constructing environmentally sustainable campuses on Roosevelt Island. We had different approaches to community benefits, such as their planned work with K-12 schools and our intention to work with City College of New York. And we had different approaches to creating benefits for start-up corporations, with Stanford proposing incubator space and Cornell proposing grants as incentives for young companies to remain in NYC.

 

How much money did Stanford spend on the proposal?

In preparing the proposal, responding to questions and through the negotiations, the university spent about $3 million on the proposal, primarily for outside consultants and architects. This was required for the due diligence to fully respond to an extensive RFP for a project that ultimately could have cost $2.5 billion over several decades. Building a project of this magnitude in New York City is complex, and we required outside expertise to help us understand the city's requirements. The NYC RFP required all competing institutions to turn in completed plans, including architectural renderings, as well as numerous legal documents that required the assistance of New York land use and real estate attorneys and experts, as well as labor experts. But much of our proposal was also developed in-house, with considerable input on the academic program coming from our faculty. They had tremendous, creative research program ideas that we were excited to implement in New York.

 

Why did Stanford suggest this in the first place, and was it worth it to the university to pursue this opportunity?

We believe that the opportunity presented by the NYC initiative could have been transformative for both Stanford and New York City. It presented Stanford with an opportunity to extend our expertise in innovation, technology and entrepreneurship to another part of the country, where we were confident we could generate economic growth and help create another technology hub within the United States. We believe Stanford has made a significant contribution to the U.S. and world economies and this would have allowed us to continue our record of knowledge transfer and job generation. There were also benefits for our California campus. New York provided us a domestic location where we could increase the number of students served by Stanford without further impacting the home campus. It also offered opportunities to recruit stellar faculty who want to remain on the East Coast and new research opportunities in industries that are New York City's strengths, such as finance, arts and media, and urban studies.

Yes, it was worth the effort. We received tremendously positive visibility over the course of almost a year throughout the East Coast. It was gratifying to see the welcome that we received in NYC, not just by the tech industry, but also by the public. There was genuine excitement at the potential for Stanford in New York. The people of New York now have an increased appreciation of the excellence of Stanford, both academically and in terms of our contributions to technology and our ability to generate job growth. Here in California, our participation in this NYC effort was in keeping with our reputation for exploring bold ideas. As is well known in Silicon Valley, not all great ideas work out, but that does not mean it is a mistake to pursue them. Stanford engaged in this selection process because of the project’s great promise, and withdrew when it became apparent to us that this would not be an achievable undertaking for the university.

 

What happens next? Will Stanford look for other opportunities like NYC?

Great universities need to find ways to continue to challenge themselves, and to reach new levels in the discovery and dissemination of knowledge. We will absolutely continue to look for those opportunities, whether it is through expanding our distance-learning capabilities from California or seeking new partners who can help us advance and innovate. You don't make progress by standing still, and the saying nothing ventured, nothing gained is most apt. Jane and Leland Stanford founded the university on these bold principles, and we will continue that tradition.

 

Now that Stanford has achieved higher visibility in NYC, will it conduct more activities there?

Our partnership with the City College of New York will absolutely continue. While we won't be co-locating there, we will be moving forward with our joint development of an undergraduate curriculum in entrepreneurship. We are exploring some other ideas as well to continue our engagement, both with CCNY and the NYC tech community.

We also appreciated all the enthusiasm of the alumni in the New York area and those who were supportive of this effort, and we are considering what type of presence Stanford may have in New York in the future.

 

Will Stanford share its NYC proposal?

We are very proud of the proposal we put forward and will make the proposal public, subject to confirmation from NYCEDC that we can do so. Copies of the proposal will be made available for review at the Green Library.

 

Additional questions or feedback?

Contact Lisa Lapin, University Communications, lapin@stanford.edu.