Proposed City of Palo Alto
Statement of Willingness to Enter into PRT4SRP Franchise Agreement
PRT4SRP: Personal Rapid Transit for Stanford Research Park, (Preliminary Draft by Cities21, 4/9/04)



Project Summary

Egress / Right-of-Way




Visual Impact


Majority Votes


Development Restrictions


Senior Mobility

Electricity Usage




Toxic Releases


1. Project benefits

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1.B. Document Objectives

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2. Project Summary. City of Palo Alto is willing to entertain Franchise Agreement proposals from personal rapid transit (PRT) developers wishing to construct a PRT system within Stanford Research Park (SRP) and adjacent areas, connecting to Caltrain's California Avenue station, VTA/SamTrans bus service, and adjacent retail establishments. It is envisioned that such a franchise would be part of long-term planning and transportation strategy for Palo Alto, and would not be operational until Year 2007 (at the earliest).

It is envisioned that new housing will be constructed within SRP on reclaimed parking lots. Such housing will be prioritized for SRP employees (as well as city employees), providing compelling motivation for SRP employers to back the PRT proposal.

It is envisioned that the State of California will continue to request aggressive new housing production targets within Palo Alto's Housing Element. To that end, construction of housing within SRP will reduce pressure to add in-fill housing within Palo Alto's single-family residential neighborhoods.

The City will assist the formation of appropriate egress and right-of-way agreements.

The City will modify General Plan and Zoning Regulations to accommodate PRT4SRP.

The City will make appropriate use of currently budgeted staff time to attract potential franchisers. Once appropriate franchising candidates are selected, such candidates will be required to fund related City conducted work.

It is envisioned that a PRT developer can structure a business arrangement whereby 1) a portion of PRT-enabled real-estate profits may be captured, and 2) "super-normal" profits may be obtained in exchange for the developer bearing the technology risk.

In recognition of the many benefits to the City of Palo Alto listed in Section Number 1, the City will charge the PRT developer an annual franchise fee of one dollar.

3. Franchise Agreement Requirements

3A) Full Environmental Impact Analysis and Community-Centered Open Approval Process
A thorough EIR/process will be followed, with some particular emphasis:

3B) Political Considerations. Important constituents will have to strongly embrace the proposal in order to assist in bringing about the "cultural change" to reduce solo commuting. These should include:

3C) Insurance

3D) Real-estate

3E) Senior Mobility. Senior citizen mobility is an important issue for Palo Alto, because the U.S. Census reveals that Palo Alto has a relatively older population compared to other Bay Area cities. Part of this can be explained by high housing prices keeping people in their existing homes while pricing out "twenty-somethings" from buying in Palo Alto. Unfortunately, our physical capabilities (eyesight, reaction time) degrade gradually as we age. Recently, there has been serious discussion of re-testing 70-year-olds with the possibility of revoking driving privileges. This testing proposal did not make much progress politically, as it was pointed out that distracted teenage drivers pose more of a threat than seniors. However, the issue of how seniors in their seventies, eighties, and nineties travel to their many activities will continue to grow as an issue. Trends predict longer life expectancies, a core desire for active lifestyles, and a growing senior population. As an aside, seniors are making principal engineering contributions at some PRT development companies.

4. Electricity Usage

PRT4SRP is expected to have a peak electrical "load" of 1.8MW or less, occurring during morning rush hour. Accommodating peak capacity is an important part of electric utility strategy because increases in maximum peak usage may require the construction of expensive, new power generation plants. It is anticipated that PRT4SRP peaking patterns will be complimentary with current summer weekday peak early afternoon power consumption patterns - no additional power plants will be required.

Annual electricity usage will be 5,159 MWh or less. At roughly $0.12 per kWh (from Tariff E7 for large industrial users), annual cost will be $619,000. Due to the need to provide "high availability" power to the PRT system when power supply is low, an additional charge may be necessary.

"Third-rail" versions of PRT will connect many electric motors to the City's electrical system. The City will make appropriate use of currently budgeted staff time to conduct a short exploratory dialog with PRT developers to better define required electrical system modifications to ensure continued high quality electric utility service.

5. Franchise Agreements - Background Information

Franchise agreements are complicated contracts between the public sector and a third party, granting the third party the right to provide a particular service. Up to two years ago, the City of Palo Alto maintained a franchise with Cable Co-op to provide cable television to residents. In Las Vegas, the city has granted a franchise to build and operate a large monorail transit system.

In the late 1880's, cities granted franchise agreements to real-estate speculators who built electric trolley systems. "The first electronic trolley line opened in Richmond in 1888, was adopted by two dozen other major cities within a year, and by the early 1890ís was the dominant mode of intraurban transit. The rapidity of the diffusion of this innovation was enhanced by the immediate recognition of its ability to mitigate the urban transportation problems of the day." (Peter Muller) By 1905, the world's largest contiguous trolley system was the East Bay Key System, an amalgam of systems consolidated by soap-king Borax Smith.

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Comments on the franchise agreement concept

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