|
Getting your Trinity Audio player ready...
|
“I am confident this Project will NOT see the light of day. The only uncertainty is WHEN the City Council will acknowledge the planning for this Project is approaching a dead end. Expect this in 2026.”
Download post as a pdf document (updated February 17, 2026)
On December 15, 2025, the City of Menlo Park received three proposals to develop 345 units of affordable housing and 556 spaces of replacement public parking on Plazas 1, 2 and 3, the only Downtown lots on the north side of Santa Cruz Avenue. The City had invited SIX pre-qualified developers to submit proposals for this Project: Alliant Communities (Alliant), Eden Housing, PATH Ventures, Related California-Alta Housing (Related-Alta), MidPen Housing, and Presidio Bay Ventures (Presidio). Three – MidPen, PATH Ventures and Eden Housing – decided NOT to submit proposals. Therefore, only two of the six invited non-profit developers showed interest in meeting the City’s affordable housing requirements for the Project.
Note: the Presidio proposal does not meet the Project RFP housing objective of a “Minimum of 345 residential units affordable to households making 15% to 80% of area median income (AMI)”. It is important to remember that the original housing objective for the Project was “at least 345 units of very low income housing”.
In this post, I examine what the Alliant and Related–Alta proposals reveal about the City’s ability to both (a) implement the proposed Project and (b) protect its Housing Element. I believe there is an extremely high risk that the City cannot accomplish either and must in 2026 develop a credible contingency plan that would satisfy both our community and the State of California. On April 1, the City must report its progress on and outlook for meeting its 2023-2031 very low-income housing obligations, and neither is good. The State will then have a strong basis for challenging the City. And in November, voters will have the opportunity to decide whether they want to take control of ALL future developments on Downtown parking lots. And looming in the background is a filed suit that challenges the City’s legal right to declare the public parking lots as “surplus land”.
In subsequent posts, I will examine additional affordable housing topics, e.g., the major risks with the Project, how Menlo Park city councils could have avoided the City’s current predicament, and ways the current Council could get the City out of it.
1. “Tops-Down” Look At Both Proposals
a) Construction. Both developers treat the Project as three individual developments with phased and overlapping construction schedules . Once constructions starts – about a year after a developer agreement is signed – construction of the entire Project would last about 3.5 to 5 years.
b) Affordable Housing. Both provide housing for 345 households with incomes of 15% to 80% of the county average median income (AMI).
c) Public Parking. Both Include full replacement of the existing 556 public parking spaces, but assume affordable housing residents can share these when Downtown businesses are NOT depending on them. Alliant preserves ground level public parking in the Plazas 1 and 3., but none in Plaza 2. Related-Alta concentrates all public parking in a 8-story parking structure on Plaza 3.
d) Building Heights. Both Include 7 and 8 story residential buildings. Related-Alta also includes a 9-story residential building and an 8-story parking structure.
e) Project Development Cost. The Alliant estimate is $200M, and the Related-CA is $494M including $62M for a nine-story parking structure.
f) City Financial Support. Neither developer is willing to fully bear the cost for the 556 public parking spaces. Therefore, both will require substantial financial support from Menlo Park.
g) Excluded Costs. Neither developer includes the potentially high cost of connecting essential services like power, water and sewer to the Project.
2. Overview of Alliant Proposal
2a. Design Concept
- Two 7-story buildings on Plaza 1, a 5-story on Plaza 2, and a 7-story on Plaza 3
- 100% affordable housing – 340 household units and 5 manager units
- Income categories: 30% AMI; 50% AMI; 60% AMI and 80% AMI (Figure 4)
- 140 extremely low income (30% AMI) units and 81 very low income (50% AMI) units
- Studio, 1 BR, 2 BR and 3 BR apartments
- Plaza 2 is dedicated to seniors and their parking
- 556 physical public parking spaces and 113 residential parking spaces.
- Public parking on the first two levels of the residential buildings on Plazas 1 and 3
- One physical residential parking space is planned for every two households. (0.5 ratio)
- Assumes parking management measures would enable residents to share public parking spaces without harming Downtown businesses.
2b. Construction Schedules
- Alliant assumes a developer agreement is signed in 1Q2026.
- Construction starts on Plaza 2 in 4Q2028 and finishes in 1Q2032.
2c. Financial Assumptions
- Project Development Costs: $200M total ( Plaza 1 – $97.5M);(Plaza 2 -$29.5 M; (Plaza 3 – $73.8M)
- Projected annual rental revenue: $8.6M in first year
- Average annual revenue per 30% and 50% AMI unit is $13,000 in first year
- Average annual revenue per 80% AMI unit is $41,370 in first year
- Average cost per unit: $580,000 (includes a share of public parking cost)
2d. General Assessment Of Alliant Proposal
Pros –
- Provides 340 units of affordable housing and 556 public parking spaces.
- Preserves existing public parking spaces on Plazas 1 and 3
Cons –
- Provides only 191 units of very low (and extremely) low-income housing.
- Three 7-story buildings
- Long overlapping construction schedules create big public parking problems on BOTH sides of Santa Cruz.
3. Overview of Related-Alta Proposal
Joint development partners, Related CA and Alta Housing, have proposed a project that includes 345 Units of affordable housing, 154 units of market rate housing, and a separate 9-story parking structure that has 574 public parking spaces. The affordable housing is for households with extremely low, very low and moderate incomes.
.
3a. Design Concept
- 7 and 8-story buildings on Plaza 1; a 7-story on Plaza 2; a 9-story on Plaza 3
- 8-story public parking structure on Plaza 3
- All residential buildings combine housing and private parking.
- Number of units: 345 households and 5 manager units
- Income categories: 30% AMI; 50% AMI; 60% AMI and 80% AMI (Figure 11)
- Affordable apartments: studio, 1 BR, 2 BR and 3 BR (Figure 11)
- 154 market-rate apartments with 185 parking spaces (1.2 spaces per unit)
- Public parking is concentrated on Plaza 3.
- 574 physical public parking spaces and 68 resident parking spaces.
- One physical residential parking space for every two households. (0.5 ratio)
- Assumes parking management measures enable affordable housing residents to share public parking spaces when not needed by others who visit Downtown.
3b. Construction Schedules
- Five separate construction phases staring with parking structure.
- Construction estimated to last about 5 years.
- Significant construction overlaps on sites 1, 2 and 3
3c. Financial Assumptions
- Project Development Cost: $494M including parking garage
- Affordable housing cost: $297M
- Market-rate housing cost $134M
- Parking garage cost: $63M
- Cost per parking garage space: $110K
Required Menlo Park Financing:
“At this time, Related and Alta do not have a fully privately funded parking garage proposal.”
3d. General Assessment Of Related-Alta Proposal
Pros
- Meets affordable housing requirement of 345 units
- Provides 154 units of market rate housing
- Meets public parking, 556 physical public spaces
- Starts construction with public parking garage
Cons
- Includes only 259 very low (and extremely low)-income units.
- The 7- and 8-story buildings and 9-story parking garage are incompatible with the mostly one-story, Santa Cruz retail building profiles and are not consistent with the City official Specific Plan.
- The single public parking tower on Plaza 1 will be viewed by many as inconvenient and does not meet the City requirement “If a developer proposes to develop an individual lot or subset of the three lots, an amount of replacement public parking consistent with the existing number of spaces on the subject lots should be provided, at a minimum.”
- The overlapping construction schedules at multiple building sites will create traffic circulation and public parking problems.
- Effective parking management measures will be difficult to implement due to the low number of residential parking spaces, e.g., the developer will need to strictly enforce the number of permitted resident vehicles and the sharing of public parking spaces.
4. Evaluation Of The Two Proposals
1.Housing. While both developer proposals meet the 345-unit affordable housing requirement in the Project RFP, neither provides the amount of very low income units specified as a City goal in the Menlo Park Housing Element and established as the original objective of the Project. Why? Because they need many apartment units that provide much higher rental revenues to justify their interest in the Project.
2. Buildings. Seven, eight and 9- story buildings – and a possible 8-level parking structure – would destroy the “look and feel” of Downtown and violate the City’s Specific Plan that requires developments preserve its “small village “character. (See Section E.3 DEVELOPMENT STANDARDS AND GUIDELINES.
2. Parking Structure. Related-Alta estimates the parking structure would cost about $60M and requires the City share in its financing. Alliant has not provided an estimate for the public parking component of its proposal and appears to only need a City loan for project development fees. Is that true? What is the amount?
3. Construction Impacts. Phased and overlapping construction on three closely located building sites would greatly reduce the convenience of accessing Downtown and discourage visits.
- The loss of up to 556 public parking on Plazas1 (249 spaces), Plaza 2 (95 spaces) and Plaza 3 (212 spaces) BEFORE these are replaced would substantially reduce the number of total parking lot spaces Downtown (now about X spaces). The loss of public parking spaces on Plazas 1, 2 and 3 would greatly increase demand for the remaining parking on Plazas 4, 5, 6, 7 and 8.
. - Concurrent construction activities on multiple sites and work on adjacent streets will disrupt and reduce traffic on Downtown streets, e.g., Santa Cruz Avenue, its side streets, and shift traffic to others, e.g., Oak Grove, Menlo, University, Valparaiso.
. - Construction activities for the entire Project will likely continue for 4 to 6 years While the two developers claim it can be completed within 3 1/2 to 5 years, this is likely too optimistic given the many Project unknowns and unevaluated risks. For example, what service infrastructure projects will be required to connect the Project to existing Downtown power, water and sewage systems and how would this work affect the Project onsite construction schedules?
5. Potential Project Impacts On The City Housing Element
“The Housing Element includes program H4.G, which prioritizes the development of affordable housing on City-owned downtown parking lots, with a goal of creating at least 345 units affordable to very low-income households (30 to 50 percent of area median income (AMI) by 2027.”
The Council approved a significant change to the RFP housing requirements during its September 2025 council meeting. (Note: Previously, Councils had required the Project to develop at least 345 units of very low-income housing”. The new housing specification BOTH expanded the income categories and substantially lowered the required number of very low-income units. (Note: the state counts very low income (50% AMI), extremely low-income (30% AMI), and acute income units (15% AMI) in its allocation of very low-income housing.)
- RFP Objective: Minimum of 345 residential units affordable to households making 15% to 80% of area median income (AMI).
. - RFP Priority: “At least 40% of the housing units are affordable to households with incomes at or below 60% of AMI, with half of those units affordable to households with incomes at or below 50% of AMI.”
Every April, Menlo Park submits an annual affordable housing report to the State for the purpose of showing its cumulative progress meeting the City’s requirements for each household income category as of the end of the prior year. The table below (Figure W), included in the 2025 report, showed how the City had performed as of December 2024. The City believed it was on track to meet every category except very low income and indicated it would need to issue building permits for an additional 622 units by the end of 2031. (Note: the City believed a “25% complete rate” was acceptable at the time of the report.) The City had expected the Project to contribute 345 Units – 55% of the remaining 622 units AND currently there are no other large, very low-income housing projects in the City pipeline.
c) a legal suit filed against the City in 2025 claims the City does not have the right to redevelop the parking lots without the prior approval of Downtown assessment district property owners. This suit will become important if either the City or State attempts to side-step the results of the November election. At a minimum the suit would likely delay the project for years.
d) The Project could require substantial City investments in public parking and public services infrastructure, e.g., power, water and sewer. And the financial impacts on the Menlo Park School District, Menlo Park Fire District, Police Department, Public Works, could be substantial. These considerations will have a significant effect on community support for the Project.
7. Conclusions
I am confident this Project inevitably will NOT see the light of day. The only uncertainty is when the Council will acknowledge the planning for this Project is facing a dead end, and I expect this will happen this year.
- I believe a simple majority of voters will block the Project in November and eliminate the Council’s ability to approve ALL future development on Downtown Parking lots without their prior approval.
There are many sound reasons most voters will support the November ballot measure.
- They will continue to believe the Project would severely damage Downtown AND our entire Menlo Park community because the City has not convinced them they are wrong.
. - They will continue to believe better sites exist for developing sufficient very low-income housing because the City has not convinced them they are wrong.
. - They will oppose the City spending tens of millions of dollars to fund the Project.
. - They do not trust the Council to represent their interests because the Council has intentionally excluded them from the planning for the Project while making many major decisions they do not support. They are also angry and resentful about how the Council has continuosly mistreated them, e.g., ignoring their concerns, defensively scolding them at council meetings.
. - They believe the Council and City staff are incapable of successfully planning and implementing a complex urban development without active community involvement.
2. I believe by mid-year 2026 the State will determine that (a) the Project is politically and financially infeasible and (b) the City does not have a credible overall plan for meeting ALL its requirements for very low-income housing. While the State could decertify the City Housing Element, I expect it will give the City a reasonable opportunity to develop an acceptable plan. However, I have little confidence the City could do this without significant community involvement.
This is an impressive, detailed, fact-based analysis by Dana Hendrickson. I agree that it’s likely a majority of residents will vote yes on the ballot measure in November, meaning the project cannot move forward without a second vote of the electorate.
Though, as Dana points out, the logical, reasonable thing to do now that we see the details from these developers, would be for the Council to abandon this project, I’m not convinced they’ll do so. That’s because the very choice of those parking lots–which are used to near capacity on a daily basis–for massive 7 and 8-story apartment complexes, was neither logical nor reasonable.
And since the Council apparently plans to move forward with selecting one of these developers and officially declaring the lots as “Exempt Surplus Land”, who’s to say it will wait patiently until November when the people of Menlo Park get to make their will known by casting their votes.
Thanks for your comment, Menlo Parker. I believe our City cannot legally side -step a ballot initiative. However, when I asked Mayor Nash, she said this was a “policy issue” and refused to answer my question. It should be asked at the February 10, council meeting so everyone can hear it answered by the city attorney.
February 10 Post Updates: A link for downloading this post as a PDF files now appears at the top of the page AND a table that compares the housing included in the two developer proposals to (a) the original objectives for this Project (August 2024) and (b) the RFP priorities (September 2025) has been added to Section 4.
What a fantastic summary of the project plans, Dana. Bravo to you. It’s something I would have expected our own City Council to give us, but, as you point out multiple times, they exclude us irrelevant taxpayers in their decisions. You say that they cannot side-step a ballot initiative but I fully expect this group to spend our tax dollars fighting us.
I sincerely wish our leaders had come to the people that live and pay taxes here instead of just green lighting what the YIMBY Coalition wanted. The entire downtown needs a redevelopment, not just the parking lots. But that seems to be too much for them to deal with. (But the bike lanes!)