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The O’Brien Group, the San Mateo-based developer behind the Derry condo-commercial project proposed for downtown Menlo Park, says it needs state funding, or its 108-condo development may not get built.
Citing rising construction costs and sub-prime mortgage trends, the O’Brien Group will ask City Council members in the next 60 days to sign off on an application to the state’s Housing and Community Development Department for up to $3.78 million to help get the project built. The estimated total cost of the project is $34 million.
The project is proposed for a 3.4-acre site bounded by El Camino Real, Oak Grove Avenue, and the train tracks.
The O’Brien Group is applying for funds recently made available by the state for transit-oriented development — multi-home projects near transit stations.
“[The O’Brien Group] has determined that there is a significant risk that the Derry project will not be viable without transit-oriented development housing program funding,” said Arlinda Heineck, the city’s community development director, in a staff report.
Jim Pollart, spokesperson for the O’Brien Group, could not be reached for comment by The Almanac’s deadline.
The grant would not cost the city anything, but a majority of council members must sign off on the application by May 5 if the project is to be eligible for state funds.
Council consideration of the grant application is not yet listed on the council’s tentative schedule.
Wait, rising construction costs? Construction costs have been cliff diving during the past year, both materials and labor. This seems to be a weak appeal for some corporate welfare.
I am not naive to the challenges in today’s housing market, but if we are to use state funds to bail out its victims, those funds would be better spent in other places.