Stanford leaseholders in Menlo Park offered lease extension program
Stanford University is offering its leaseholders in the Menlo Park neighborhoods of Stanford Hills and Stanford Creek the opportunity to extend their agreements with the university for as many as 89 or 96 years from now.
Menlo Park residents who are Stanford leaseholders in the Stanford Hills and Stanford Creek neighborhoods are being offered options that could extend their leases with the university as much as 89 or 96 years from today, depending on location and the individual choices of the leaseholders.
Stanford's Lease Extension Offer, presented on April 24 to 123 leaseholders in these neighborhoods, is designed to provide residents with long-term flexibility and peace of mind and the university with the opportunity to eventually transition the properties into its faculty-housing program over an extended period of time. The availability of single-family housing in desirable neighborhoods is critical to the university's faculty recruitment in a competitive market.
The program covers 78 single-family homes in Stanford Hills and 45 homes in Stanford Creek. These Menlo Park subdivisions were created in the 1950s when Stanford leased some of its land to real estate developers for 99 years. The developers, who paid for the leases in full at the outset, assigned the ground leases on subdivided parcels to the individuals purchasing the homes. The original leases have no provision for renewal or extension.
Lease agreements on these Menlo Park homes are due to expire in 38 years, on Feb. 28, 2051, in Stanford Creek, and in 45 years, on April 30, 2058, in Stanford Hills. The Lease Extension Offer will give current residents – and subsequent purchasers – the opportunity to amend their leases multiple times to extend the lease terms with Stanford for up to 51 more years beyond the current termination dates.
Stanford is offering 10 free years of additional lease term to all leaseholders that sign up for the Lease Extension Offer. Beyond the 10 free lease years, leaseholders and their successors will have the ongoing right to extend their leases for a fee. When leaseholders decide to sell their properties now or in the future, they will be required to give the university the first chance to purchase the leasehold at market rates. If the university declines, the leasehold can be sold to a third party, according to Jean McCown, Stanford director of community relations.
The program covers 78 single-family homes in Stanford Hills and 45 homes in Stanford Creek. (Click image to enlarge)
The university's Lease Extension Offer will remain open for six months or until Oct. 31. If leaseholders opt not to sign up, the original lease agreements will remain in effect and will expire in either February 2051 or April 2058.
"The provisions of this program are designed to give our leaseholders both certainty and flexibility well into the future," said McCown. "If they accept the university's offer by Oct. 31, they will have the ability to extend their occupancy for many years, and when the time is right for them, have the opportunity to sell their property to Stanford at market value. These properties could, conceivably, turn over several times before the ultimate end of the leases. Future owners, when they decide to sell, will also be required to make their first offer to Stanford."
Stanford's goals for this program are to provide an extended period of time for leaseholders to remain in their properties, while also creating an opportunity for Stanford to acquire the properties in both neighborhoods to add them to the university faculty-housing program. Under the faculty-housing program, which currently covers homes located on the Stanford campus, only eligible faculty members can purchase the properties. Because lease terms to faculty are for 51 years, the homes are subject to property taxes.
McCown said the university decided to announce the new program well in advance of lease expiration dates to give leaseholders flexibility in their future planning. Stanford hand-delivered packages explaining the new program to the leaseholders on Wednesday morning. The university intends to follow up with each leaseholder and offer personal meetings to answer questions, McCown said.
Under the 1885 Founding Grant, which created the university, Jane and Leland Stanford prohibited sale of the university's land, predicting that the land would eventually prove to be among the new institution's most valuable assets. The Stanfords always envisioned a campus that could accommodate all of its students and faculty, living in an ideal educational environment. As a result of the terms of the Founding Grant, Stanford does not have the option of selling the Menlo Park properties to current leaseholders.
Both Stanford Hills and Stanford Creek are located off Sand Hill Road. Stanford Creek borders San Francisquito Creek. Stanford Hills is adjacent to the Stanford foothills.