News - July 28, 2010

Council begrudgingly approves legal settlement involving El Camino project

by Renee Batti

They were peeved and frustrated in doing so, but Menlo Park City Council members on July 20 gritted their teeth and unanimously supported a settlement agreement with Concerned Citizens of Menlo Park, a group of anonymous members who in November 2009 sued the city and would-be developers of the property at 1300 El Camino Real on environmental review issues.

The settlement agreement scales back the size of a planned grocery store on the site. The only person to emerge as being a member of the Concerned Citizens group as the settlement was made public two weeks ago is Tony Alexander of San Jose, the political director of the United Food and Commercial Workers Union, which represents employees of grocery stores including Draeger's and Safeway.

Mr. Alexander has not returned numerous phone calls from The Almanac.

The lawsuit, which challenged the city's approval of the environmental impact review for the planned project at the site — the former home of the now defunct Cadillac dealership — named the city and the developer: Peter Pau, president of Sand Hill Property Management; and SHP Los Altos LLC.

The original project called for 110,000 square feet of office and retail space, including about 51,000 square feet devoted to a grocery store. The agreement approved by the council and the developer doesn't reduce the size of the overall project, but limits the grocery store size to 32,000 square feet. It also prohibits the "self-checkout of alcohol sales" by any retail business on the site.

The anonymity of the plaintiff was a sore point for council members. But City Attorney Bill McClure said the law protecting citizens' right of association also protects their privacy as members of a group, making the filing of this type of lawsuit by anonymous members of a group legal.

The settlement terms were worked out by the developer and the Concerned Citizens' attorney. Jeff Warmoth of the development firm, who said he didn't know the names of individual plaintiffs during negotiations with the group's lawyer, said the lawsuit had "no basis in fact," but he urged the council to approve the settlement. "It's not something we're happy about," but the company wants to move ahead and build the project, he said.

The plaintiffs agreed not to oppose future housing the company may want to add to the retail development, Mr. Warmoth said.

Councilman John Boyle noted that, given the anonymity of individual plaintiffs, it would be difficult to know whether one of them files another legal action against the developer once a housing plan is brought to the city for approval.

Before voting to approve the agreement, Councilman Heyward Robinson said that, "as distasteful as it may be," approval is the right thing to do.

Mayor Rich Cline said: "I really have a problem with it. ... It sets a real wicked precedent. If I had my druthers, I would get in the ring" and fight the lawsuit. But the developer, he added, "has been up here too many times."

The agreement requires the developer to pay the Concerned Citizens $38,000 in attorney fees and costs. The developer must also pay "for all city costs and fees associated with processing the project and fees related to the lawsuit and settlement," according to the staff report.

The lawsuit was filed using the private attorney general statute, which allows private citizens acting as representatives of the public interest to bring lawsuits against government entities.

It challenged the EIR done for the project on grounds that it failed to evaluate the project's air pollution impacts, and failed to follow required procedures in evaluating the project's traffic, land-use, and greenhouse gas impacts. The settlement agreement did not address these environmental issues.

The law firm representing the Concerned Citizens, Lippe Gaffney Wagner of San Francisco, is a public interest firm "protecting the natural environment and public access to government records," according to its website.

Keith Wagner of the firm wouldn't say how many people belong to the plaintiff group. When asked to comment on Councilman Boyle's concern that an anonymous member of the group could challenge the project again when a housing component is added, he asserted such a challenge wouldn't happen. "Why would they?" he asked.

In 2008, when details of the planned development of the site began emerging, Whole Foods specialty grocery was said to be interested in moving there, which raised concerns by several business owners. Among them was Richard Draeger, whose family owns Draeger's market. When the lawsuit was filed, Mr. Draeger said his store was not involved.

Mr. Warmoth said passers-by may see some action at the site this week. PG&E is scheduled to disconnect utilities, and building demolition should begin soon after, he said.


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