Council majority forgot to negotiate for public
Original post made by HorseTrader on Oct 24, 2006
"Exactions" are not "Public Benefits" though project proponents like to make it seem as if reimbursing tax payers for public costs is a genuine act of generosity.
"Public Benefit" is a planning term of Art that has several meanings, depending on context, that are different than the lay meaning.
Menlo Park was not legally required to generously upzone the project from 18.5 units/acre to 50 units/acre. Two similar downtown projects, Beltramos and Menlo Square, were approved or built recently with conforming housing components of 18.5 units per acre, so the upzoning was not even required to attract development, it was purely gratuitous.
According to a senior planner, the net density of the Derry project is 50 units per acre. The zoning code previously allow 18.5 units acre. Therefore about 60% of the 135 Derry condo units (about 80 units) were enabled by the city council's generous upzoning.
At $800k per condo (the prices were published on the developer's web site) City Council generosity added a whopping $64M in project revenues. (80 units @ $800k).
Now Menlo Park can either add $64M in revenue to the project for nothing, or they can negotiate to get something substantial in return. Recently Stanford built two soccer fields for Palo Alto worth about $4M in exchange for transferable development rights that were no more dense than those given to Derry.
Finally the 1% to 2% of project cost figure was a recommendation of a subcommittee of Menlo Park council members that included Lee Duboc and Andy Cohen. When council "forgot" to adopt this recommendation, Andy Cohen wisely said he wouldn't support the upzoning, but Duboc, Winkler, Jellins, and Fergusson gave it away for free, though Fergusson put up a fight.
Asking for something in return for adding $64M project revenues is not "extortion," but asking for NOTHING in return for adding $64M in project revenues is just naive.
And forgetting to cut a deal supported by a bi-partisan subcommittee of council *BEFORE* approving the project is simply unbelievable.
on Oct 25, 2006 at 1:33 am
Horse Trader: Do you think Proposition 90 will play a role here? After Nov. 7, if Proposition 90 passes, will the city have to pay the property owner $64 million for "downzoning" the property by reversing the zoning ordinances under the threat of a referendum?
Or, if the referendum passes, would that be considered a "downzoning" for which the property owner must be compensated under Prop 90?
How about the adjoining property at 1300 El Camino Real? The general plan and zoning language were changed to allow density on that site equal to the Derry site. Although 1300 technically wasn't rezoned, I understand, because the zoning map was not changed, could the propoerty owner have a claim under Proposition 90, which would require a government agency to compensate a property owner for any action that reduces the market value of a property, unless that act is justified by public health and safety.
on Oct 25, 2006 at 9:09 am
The "upzonings" are not yet entitled.
The laws enabling the entitlement were challenged within the legal time limit of 30 days after enactment. If devlopement rights were legally "entitled" then "taking" them could result in a "takings" suit.
1300 is not yet entitled either, as far as I now.
If the referendum passes, (the laws are not enacted) then no vesting takes place. No vesting, no takings.
Prop 90 really deals with another power, "eminent domain." Prop 90 restricts and regulates government use of eminent domain.
In general, I cannot say what effect Prop 90 might have on other takings claims that are not related to an eminent domain, but I do know that the Supreme Court has consistently found that government has no obligation to preserve market value. It must preserve "some use" of the property, it cannot effectively zone away *all* uses, but it is not obligated to preserve those uses which would fetch highest market values.
on Oct 25, 2006 at 10:58 am
Thanks. You make some good points about the referendum.
Everyone should be clear about this: Prop 90 goes well beyond eminent domain. See Almanac story:
Also, Prop 90, as a constitutional amendment, may override Supreme Court decisions about government liability for actions that reduce the market value of property.