COUNTY OF SAN MATEO

Inter-Departmental Correspondence

County Counsel

DATE:

December 4, 2002

BOARD MEETING DATE:

January 7, 2003

TO:

Honorable Board of Supervisors

FROM:

Thomas F. Casey III, County Counsel

SUBJECT:

Correction of Property Tax Roll: APN 074-450-020, 2111 Sand Hill Road, Menlo Park (Stanford University and William and Flora Hewlett Foundation)

Recommendation

Approve a change to the 2002 tax roll to reflect the granting to the Leland Stanford Jr. University ("Stanford University") of a welfare exemption pursuant to section 214 of the California Revenue & Taxation Code for property located at 2111 Sand Hill Road, in Menlo Park, California.

Background

Stanford University owns the property identified above, which consists of approximately thirteen acres of land with improvements. Prior to 2002, Stanford University made sole use of the property, which was therefore exempt from property taxation pursuant to the college property exemption contained in sections 3(e) and 5 of Article XIII of the California Constitution, and section 203 of the California Revenue & Taxation Code.

In 2001, Stanford University leased a 7.1 acre portion of the Sand Hill Road property to the William and Flora Hewlett Foundation (the "Hewlett Foundation"), which is presently using the property to construct an office building. After entering into the lease with the Hewlett Foundation, Stanford University no longer used the leased portion of the San Hill Road property for educational purposes and, consequently, it no longer qualified for the college exemption as of the 2002 lien date. Thus, as of that lien date, the leased portion of the property became taxable.

Discussion

In February 2002 both Stanford University and the Hewlett Foundation applied for welfare exemptions with respect to the leased portion of the Sand Hill Road property, pursuant to section 214 of the California Revenue & Taxation Code. The State Board of Equalization approved Stanford University's welfare exemption application in August 2002, and the Hewlett Foundation's application in September 2002, in both cases after the close of the 2002 roll.

As a result of the granting of the welfare exemption, the County property tax roll for 2002 should be corrected. Since the correction will result in a tax dollar decrease of $152,285.08 to the 2002 roll, the approval of this Board is required.

Vision Alignment

The implementation of this proposal will further commitments and assist on achieving goals set forth on the County's Shared Vision 2010 report. Specifically, this proposal implements the commitment of providing "responsive, effective, and collaborative government." Similarly, the instant proposal will help the County to achieve the goals of ensuring that "[g]overnment decisions are based on careful consideration of future impact"

Fiscal Impact

The fiscal impact of this action is estimated to be a $152,285.08 tax dollar decrease in the 2002 roll. The County's General Fund share of this decrease is approximately 14% of this amount (i.e., $21,319.91).