Almanac

News - January 23, 2013

Facebook, Menlo come to terms over new campus

by Sandy Brundage

Looks as if Menlo Park got many of the items on its wish list for the development agreement related to Facebook's plans to develop a second campus on Constitution Drive. The proposed agreement, drafted by Facebook and city negotiating teams, was released Jan. 17 and now goes to the City Council.

Facebook proposes building a sprawling office structure designed by Pritzker Prize-winning architect Frank Gehry. An estimated 2,800 employees, mainly engineers, would work there. The 433,555-square-foot building would perch on top of approximately 1,540 parking spaces, and blend into the landscape through ground-level gardens that wind their way up to a rooftop terrace, creating a forest visible from the Bayfront Expressway.

So what's the price tag in terms of community benefits? City officials have emphasized their desire for ongoing revenue and funding for infrastructure improvements for community benefits such as easing the increased burden on transit and schools as Facebook employees move to the area and have kids.

The proposed development agreement provides ongoing revenue through a total payment of $1.5 million, disbursed as $150,000 per year for 10 years. Facebook would contribute an additional $100,000 to the community fund for nonprofits, created as part of its agreement to develop its headquarters, and another $100,000 to Menlo Park for unspecified improvements to the area surrounding the campus.

Construction companies with subcontracts worth $5 million or more would get permits allowing Menlo Park to collect sales and use taxes on materials used to build the new facility. The city estimates that would divert $100,000 to $300,000 to Menlo Park. Facebook would also pay the city use taxes for purchase orders exceeding $500,000 for items related to getting the campus ready for occupation, although the city's staff report states that this may not actually generate any revenue.

Rounding out the financial benefits, the agreement guarantees 10 years of property tax payments to the city based on the projected $300 million assessment value of the redeveloped property.

The proposal would institute a vehicle trip cap of 1,100 trips during commute hours to the Constitution Drive campus and 6,350 daily trips, with the same financial penalties as for the main campus — $50 per trip over the cap per day, with escalating fees tied to the number of excess trips.

As for maintaining benefits even if Facebook someday closes its headquarters, the development agreement for its other campus includes provisions designed to keep several clauses alive, such as the commitment to helping fund completion of the Bay Trail.

"Being a good neighbor in Menlo Park is important to Facebook; which is why we've chosen to make additional investments in our community — even though the project is largely code-compliant. This is a project that the community of Menlo Park will be very proud of," a Facebook spokesperson told the Almanac.

Council action

pstyle:infotext>The City Council is scheduled to vote on the development agreement during its regular Jan. 22 meeting, which starts at 7 p.m. in the council chambers at the Civic Center at 701 Laurel Street.

• Go to tinyurl.com/a3ub7mw to review the agreement and associated staff report.

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