Thursday, December 29, 2011

Stanford Answers Questions On Withdrawal Of Roosevelt Island NYC Applied Sciences and Engineering School Proposal - Number Of Students, Faculty, Building Size, Construction Timeline Similar To Cornell Says Stanford But NYC Introduced Additional Unacceptable Requirements After Bid Was Submitted - Was Stanford's Silicon Valley Location An Inherent Conflict?

Stanford University News reports on:

Frequently asked questions regarding Stanford's withdrawal of the NYC campus proposal

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 be share it with interested parties both on and off campus. Copies of the proposal will be made available for review at the Green Library.
Wired reports:
... Cornell and Technion beat — or at least outlasted — Stanford University, the school whose marriage of high-tech smarts and entrepreneurial verve in Silicon Valley Bloomberg wanted to reinvent in New York. Stanford unexpectedly withdrew its bid shortly before the results were announced.

“Stanford was inherently conflicted from day one,” Kim told Wired. After all, Mayor Bloomberg didn’t propose that New York would match or follow Silicon Valley or Boston-Cambridge as high-tech hubs. He proposed to make New York City the best in the world.

“If you want to be number one, Silicon Valley has to be number two,” Kim says.

It was harder for Stanford to commit itself and its resources to that vision than Cornell or many of the other bidders. Not without causing serious agita back home in Palo Alto....
and the NY Times adds that Cornell's:
... leaders believed that their plan needed to be clearly better than Stanford’s to win — that if things were roughly equal, Stanford would prevail.

The city asked for at least 250,000 square feet in the first phase, and a million over 25 years. Cornell-Technion proposed 400,000 and 2.1 million, with space for 2,500 students and 280 professors. Others said classes would start in September 2013; Cornell-Technion promised September 2012.

The plan was tailored to New York, focusing on technology for fields in which the city is a leader, like medicine, urban planning, finance and advertising. The schools stressed Cornell’s strong alumni presence in New York, especially its burgeoning technology sector.

They were also determined to be the most agreeable: When the city asked bidders to “mark up” drafts of legal agreements, signaling their objections, Mr. Steel recalled, the edits from Cornell and Technion “were much lighter than those from other institutions.”....
Here's video of the press conference announcing Cornell's selection to build the NYC Applied Sciences and Engineering School on Roosevelt Island and my interview with Stanford President John Hennessey during one of his visits to Roosevelt Island last October.

You Tube Video of Stanford President's Visit To Roosevelt Island