Foothill College's prospects for building a major education center in south Palo Alto suffered a fatal blow Tuesday morning when the Palo Alto City Council decided not to sell a portion of Cubberley Community Center to the college.

For the second straight meeting, the council held a late-night discussion that dragged on past midnight and featured comments from community members urging the council not to sell the Cubberley land. But unlike on June 27, when the council asked staff to consider sending a "letter of interest" to Foothill, on Tuesday members decided that the city's best response to the college district is, "Thanks, but no thanks."

The Palo Alto council decided to send the Foothill-De Anza Community College District a letter stating that it is not interested in selling the Cubberley site, but indicating the city's willingness to work with Foothill on exploring other sites for Foothill's use. The council reached its decision not to sell the land after a wave of protests from city residents and former elected officials, most of whom argued that the Cubberley space would be needed for a future school.

Their arguments proved convincing. Instead of negotiating with Foothill, the city will now work with the Palo Alto Unified School District to come up with a new plan for Cubberley.

Larry Klein, who supported sending a letter of interest to Foothill two weeks ago, quoted Kenny Rogers in explaining why he now proposed sending a letter of non-interest.

"Like the old country song says, 'You got to know when to hold 'em, know when to fold 'em.'" Klein said. "To put our staff, ourselves and the community through a useless exercise just doesn't make any sense."

The council voted 8-0, with Gail Price absent, to direct staff to work with the school district on creating a plan for the busy and dilapidated community center at Middlefield Road. The city owns an 8-acre parcel of Cubberley; the school district owns the rest.

In recent weeks, school officials took a stronger stance on the Cubberley land, which they see as a potential site for a new school. On June 28, one day after the council voted 6-3 to direct staff to draft a "letter of intent," the school board passed a resolution stating that it believes the district "will need the 35-acre contiguous Cubberley site to provide high quality and comparable K-12 educational services to all students in all neighborhoods."

"We also believe that working together with the City of Palo Alto to define and address our joint Cubberley interests will produce effective and mutually beneficial decisions for the residents we serve," the district's motion stated.

The council's decision Tuesday morning still leaves room for the city to negotiate a land deal with Foothill some time in the future, though given the lack of available land it's unclear what such a deal might look like. Foothill, which already has a campus at Cubberley, is seeking to build a new state-of-the-art Education Center and intends to make a decision on the site of the new center later this summer. The college district is eying a site in Sunnyvale and has issued a request for offers to private parties.

The council's decision not to sell the Cubberley parcel also raises the possibility that Foothill will leave Palo Alto once it builds the new education center in another community.

Some council members, particularly Karen Holman, have argued that the city should focus not on the 8-acre site, but on the entire community center, which is poorly maintained and facing an uncertain future. In addition to serving as Foothill's Middlefield Campus, Cubberley houses an eclectic mix of businesses and organizations, including day-care centers, music schools and dance studios.

"I hope we can get beyond looking at eight acres and look at the site as a whole," Holman said.

Vice Mayor Yiaway Yeh and Nancy Shepherd continued to call for a stronger dialogue with the school district. Yeh's motion, which the council passed, calls for City Manager James Keene to return to the council on Oct. 3 with a plan for working with school officials on shaping Cubberley's future.

The discussions would include the school district's process for building a school at Cubberley and the possibility of leaving a portion of the 8-acre site available to community groups.

Though this week's discussion was less heated than the one two weeks ago, when dozens of artists, dancers and city residents urged the council not to sell, the arguments from the public were similar. Former mayors and school trustees criticized the council's process for dealing with the Cubberley site -- citing, among other things, the late hour -- and urged members to keep the land. Former Mayor Mike Cobb said selling the land would be a "tragically bad decision" while former Mayor Lanie Wheeler called the Cubberley parcel the "only site remaining in the community that's suitable for reuse as a secondary school."

Carolyn Tucher, a former member of the school board, also argued that the school district needs the space and urged city officials to work with school officials to find adequate space for the students.

"Let's get to work," Tucher said. "Let's find the answer for today and tomorrow and see if we can find another solution that benefits the city, the school district and Cubberley's neighbors."

Mayor Sid Espinosa said it was "unfortunate that we got to this place with Foothill," but noted that the council's decision still leaves the door open for future discussions.

"We didn't close the door completely," Espinosa said.

Espinosa and Klein both noted that the Cubberley dilemma has, at the very least, forced the city and the school district to collaborate more closely on a very important local asset.

"I don't know if this is a silver lining, but it's at least a bronze," Klein said. "I think we'll have some serious discussions with the school district."