The Palo Alto City Council reached a tentative deal Wednesday night that could get the ball rolling on the University’s hospital expansion plans. If passed, the deal would allow the Stanford University Medical Center to exceed its zoning regulations in what will be the largest construction project in the city’s history.

The new offer guarantees the city a minimum of $8.1 million in construction-use tax revenue by 2025, adding to a rejected plan’s proposal to pay Palo Alto $1.7 million up front to cover projected increases in operating costs.

The estimated $173 million package also offers $90.9 million in Caltrain Go Passes to all hospital employees, $25 million for four new Marguerite shuttles and $5.1 million over 51 years for a transportation demand management coordinator who would address the city’s concerns over increased traffic from the expansion.

Under the offer, Stanford would also contribute $4 million to the city’s community health programs, $3 million in patient benefits for low-income residents, $23 million for affordable housing programs and $12 million for climate change mitigation efforts.

Once the deal passes and the Environmental Impact Report (which will be reviewed May 11) is approved, the hospitals can proceed with the expansion. The city council is scheduled to discuss the development agreement in June.

–Ivy Nguyen