Menlo Park: Hotel, office complex seen as boost for city revenues Menlo Park: Hotel, office complex seen as boost for city revenues (October 12, 2005)

** Architect estimates a $2 million annual gain for city's coffers.

By Rory Brown

Almanac Staff Writer

A new 125-room hotel, fitness center, restaurant and 514,543 square feet of office space would give Menlo Park something it desperately needs: a $2 million annual hike in city tax revenues, according to an architect hired by the Bohannon Development Co.

At an October 4 study session, the Menlo Park City Council reviewed developer David Bohannon's proposal to amend the general plan and rezone two sites -- at 110-190 Independence Drive and 101-135 Constitution Drive -- to pave the way for the new facilities.

Located near Marsh Road and U.S. 101, the two sites total 13.5 acres. Mr. Bohannon, who said it may take 15 years to fully build and occupy the facilities, said he has received inquiries from hotel operators and potential office tenants.

He seeks a zoning change from general industrial to mixed-use commercial business park.

The plan is to build the hotel, fitness center, restaurant and one 90-foot, five-story office building on the Independence Drive site; and two 90-foot, five-story office buildings on the Constitution Drive site.

Phil Erickson, of the Oakland-based Community Design and Architecture, the architecture firm hired by Mr. Bohannon's company, presented the development plan. The project, once finished, will produce at least $2 million in tax revenue annually for the city, with numbers unadjusted for inflation, said Mr. Erickson.

His breakout is $1.5 million in property tax, $106,000 in sales tax, and $430,000 in hotel tax.

Currently, the two sites generate approximately $247,168 each year for the city, including $30,000 in sales tax.

The number of employees on the two sites would jump from 540 to approximately 1,800, said Mr. Erickson.

"There's an opportunity to reap economic benefits and minimize impacts on the rest of the city," said Mr. Erickson. "Right now we're facing impacts without benefits as surrounding cities develop similar projects."

Mr. Erickson referred to University Circle in East Palo Alto and the Stanford Research Park in Palo Alto as examples of developments that create traffic but not revenue for Menlo Park.

The employees of the new facilities could use the proposed Dumbarton rail line, which would pass several blocks from the site, said Mr. Erickson.
Other sites

With a long-term project and a zoning change in mind, members of the council asked why zoning changes would be limited to only two sites.

"Why not enable development to take place in the area broader than the [Bohannon] properties?" asked Mayor Pro Tem Nicholas Jellins.

Councilwoman Kelly Fergusson also encouraged the council and city staff to examine the scope of what would be rezoned.

"We need to determine if we're looking at two sites, or a comprehensive plan that gives us a much better idea of what the fiscal impacts are" said Ms. Fergusson.

Between the two sites owned by Mr. Bohannon is a 2.6 acre parcel with several sites owned by different landlords. Several of the property owners want the middle parcel to be incorporated into any rezoning plans.

"I applaud the idea of moving forward with this, but I'm puzzled that properties between the two parcels would not be included in the zoning," said Charles Brock, who owns property on the middle parcel. "The time will come when [those properties] will need to redevelop."
Auto dealer?

Discussing more immediate plans for the area, Ms. Fergusson asked if an auto dealership could temporarily occupy a portion of either the Independence Drive or Constitution Drive site during construction. The possibility has come up in prior discussion, she said.

"The proposal does not preclude potential for an interim auto dealership use, but we're not currently talking about auto use or auto sales on the site," said Mr. Bohannon.

A draft environmental impact report on the proposal is scheduled for release in November, according to Justin Murphy, the city's development services manager. Some neighborhood meetings have already been held, and more will be scheduled for the upcoming months, said Mr. Bohannon.

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