The expansion was to add 240,000 square feet of retail space and a 240-room hotel to the existing 1.4-million-square-foot [net rentable], 70-acre development. Simon tells GlobeSt.com that it "certainly understands" the University's decision and acknowledges the school's rights as landowner to withdraw the application. It's just not at all happy about it. Neither is the City of Palo Alto.

"Simon is very, very disappointed in the outcome because we believe it's important to expand Stanford Shopping Center to be competitive [given] the expansion of other shopping centers in the area," Simon spokesman Les Morris says. City officials also "expressed disappointment with the University's decision" to shelve the retail center expansion, according to a statement released by the city.

Stanford says in a prepared statement that by shelving the project it could better focus on the 1.3 million-square-foot expansion of Lucile Packard Children's Hospital and the Stanford University Medical Center. The shopping center expansion and the hospital expansions were applied for as a combined project in early 2007, however; unlike the retail center expansion the university has a state-mandated 2013 completion deadline for the hospital—a deadline it hopes to have extended to 2015 because it is running behind schedule.