Palo Alto orders demolition of former Stanford Terrace Inn

The Palo Alto City Council on Monday approved a demolition order for the dilapidated building in College Terrace that used to house the Stanford Terrace Inn, rejecting an appeal from the property owner.

Between insufficient fire sprinklers, hazardous materials stored in the garage, broken doors and other issues, the conditions on the premises were among the worst city officials had ever seen during their careers, according to multiple inspection reports over the course of the past several years. Palo Alto Fire Marshal Tamara Jasso, who visited the site on the El Camino Real corner in March 2024, reported to the council Monday that the damage to the building was so severe it could endanger neighbors and first responders should a fire break out.

“We would not want to send firefighters into the building in the event of a fire,” Jasso said.

The building at 531 Stanford Ave. used to be a hotel, but was converted in 2020 to a residential building for long-term stays, mostly for clients who were affiliated with Stanford University. The premises were vacated in spring 2024 by the city, which cited similar code violations back then as a reason to shut it down.

“This was a conversion of one use to another, and there were no permits that were pulled to activate or implement any of those changes,” Planning Director Jonathan Lait said. “And in fact, there was a significant amount of unpermitted work that took place.”

While the building has been technically vacant, staff noted evidence of trespassers staying on the property, such as blankets and fecal matter. Jasso said this compounds the fire hazard because people living in the dilapidated building would be likely to start small fires to keep warm and cook food. The property owners maintained that additional security measures such as higher fencing have prevented recent trespassing attempts.

Since 2024, the property owner has submitted two housing project applications to repurpose the site, neither of which have been approved by the city. The most recent application calls for 22 three-story homes, subdividing the existing lot into 22 spaces and restricting one of the homes to low-income households.

The demolition of the former Stanford Terrace Inn building is part of that housing application, Brian O’Neill, the attorney representing the property owners, said.

“What we want is the same thing that the city wants: removal of the building,” O’Neill said. “But unless we are sure that we can actually get something from that land, redevelop that land with a beneficial use, unless we actually get an approval in our hands, then we can’t be certain that we can actually use that private property.”

Lait and other city staff maintained the housing applications from the owners have been incomplete, delaying the approval process. Staff also recommended against linking the proposed development to the demolition process, stating “these buildings constitute a public nuisance and present significant ongoing public safety hazards that cannot wait for uncertain future development approvals,” according to a report to the council.

Property owners Sophia Y. Huang and Stanford Orion filed an appeal to the city’s original Oct. 17 demolition order on Nov. 13, arguing the timeline for the demolition was unreasonable and that the city did not adequately prove the building was dangerous enough to warrant such an action in the first place.

In order for the city to approve a demolition order, it must make one of three findings: the building is more than 50% damaged or deteriorated, the building cannot be repaired to eliminate all the code violations or the building constitutes a fire hazard.

Lait told the council he believes the property meets all three findings and said in addition to the existing damage and fire hazard, any effort to repair the building would essentially require demolition anyway because the code violations are so extensive.

O’Neill, the attorney representing the property owners, took issue in particular with the 50% damage claim. He said the city would have to first assess the value of the property in order to determine it was damaged beyond 50%, but staff disagreed, saying this only applies to eminent domain and not demolition ordinances.

For their part, councilmembers had little in the way of discussion about the demolition or the appeal. Shortly after hearing from both the property owners’ attorney and city staff, Vice Mayor Greer Stone moved to vote on the staff recommendation denying the appeal.

The property owners have six months from Monday to demolish the building.

“There’s an ultimate irony here that both sides would like the building to come down, and so if it comes down and an application comes in that is viable, our planning department is going to evaluate it,” Councilmember Ed Lauing said.

This story originally appeared in Palo Alto Weekly. Riley Cooke is a reporter at Palo Alto Weekly and Palo Alto Online focusing on city government.