It's taken a while, but the developer behind the Derry condo-commercial project and the Menlo Park residents group that led a successful referendum campaign against it have agreed on a new project.

If both parties get their way, the Planning Commission and City Council will approve a new, smaller project in coming months that includes 108 condominiums in a cluster of three-story buildings; a 3,500-square-foot plaza with a restaurant and retail space; and an extra $2 million payment to the city.

The design would be similar to the original Derry project approved by the previous council in September. That project called for 135 condos and additional commercial space in three- and four-story buildings up to 50 feet high.

As with the previous project, the compromise development is proposed for a 3.4-acre site that borders Oak Grove Avenue and Derry Lane, between El Camino Real and the Caltrain tracks.

The developer, the San Mateo-based O'Brien Group, and the residents group Menlo Park Tomorrow, signed off on the compromise project on May 31, said Morris Brown, head of Menlo Park Tomorrow.

Last fall, Mr. Brown's group collected more than 2,500 signatures against the original Derry project on the basis it would increase traffic and overcrowd schools.

Rather than rescind the original project or put it to the voters after the referendum campaign, the new council opted to let the parties negotiate plans for a new project -- a process that took almost seven months.

"We think it's a big plus for the community, and we hope the community will like it," Mr. Brown said, noting the negotiations were tough. "It's a blighted area, and we need something built there right now. We never intended to stop the project -- we always wanted something to be built there."

Mr. Brown said former councilmen Paul Collacchi and Jack Morris, former planning commissioner Patti Fry, and resident Elias Blawie helped him negotiate the new project with the developer.

Jim Pollart of the O'Brien Group said the project won't go before the Planning Commission "for several months," but he said both the O'Brien Group and the Derry family are happy with the agreement.

"We are pleased that we were able to work with [Mr. Brown] and concerned citizens to reach a compromise solution to this situation," Mr. Pollart said in a press release. "We look forward to moving ahead with the revised project, which we believe will be an asset to both downtown Menlo Park and the entire community."

High-density debate

When voting 4-1 to approve the original Derry project (with Andy Cohen opposed), the council allowed the construction of up to 50 units per net acre on the Derry site -- far more than the 18.5 units per acre allowed under the existing zoning.

Supporters of the Derry project said it was just what the city needed -- high-density housing along a major transit corridor; but opponents said the city wasn't fairly compensated for allowing so many homes per acre.

The new project includes plans for 40 homes per net acre, but the city would be rewarded with a $2 million payment from the developer, Mr. Brown said. He noted that other public benefits include a 3,500-square-foot public plaza similar to the area outside Cafe Borrone at Menlo Center on El Camino Real, and the construction of a pathway traversing the development area to give pedestrians easier access El Camino Real.

Councilman Richard Cline appeared favorable to at least one aspect of the compromise plan. The city wouldn't have been properly compensated for allowing high-density development under the originally approved project, he said.

Mayor Kelly Fergusson said she wouldn't take an official stance on the new project, but said she's happy the two sides have come to an agreement. "Now the public process begins anew," she said.

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