Ownership of Menlo Park’s 80 Willow Road development raises questions for some

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Why did a Russian businessman with reported ties to the former Russian president buy the 80 Willow Road property that once housed Sunset Magazine headquarters? It’s a question that has puzzled some Menlo Park residents after the property’s developer proposed constructing a 39-story tower on the property. 

“Just say nyet to the towers,” said a protester’s sign at a Sept. 10 demonstration that opposed the development, using the Russian word for “no.” 

“Too much traffic, Willow Park, we don’t need an oligarch!” another protester chanted. 

Some Menlo Park residents have expressed concern about the development’s ties to Russian businessman Vitaly Yusufov, the son of Russia’s former energy minister Igor Yusufov. Forbes valued the elder Yusufov’s net worth at $1.1 billion in 2022, and the Yusofov family’s connections reportedly reach the peak of Russian politics: the Yusufovs are reportedly deeply financially intertwined with Dmitry Medvedev, Russia’s former president and prime minister, according to investigative news outlet Proekt and analysts who study Russia and Ukraine.

“A family repeatedly identified by Russian investigative journalists as holding or managing assets in Medvedev’s interests can own a $72 million property in Silicon Valley and pursue a massive development there, while Medvedev sits on Russia’s Security Council threatening the U.S. with nuclear destruction,” wrote Olga Lautman, a senior fellow at the D.C.-based think tank the Center for European Policy Analysis.

The controversial 80 Willow Road development, known on its website as Willow Park, is currently in the process of obtaining city approval. Community members have expressed a range of concerns about the development, including its environmental impact on nearby San Francisquito Creek, the size of the building and the possibility that the development will produce more jobs than it provides in housing units. The project’s 39-story building would be the tallest tower in California outside of San Francisco, Los Angeles and San Diego. (Read The Almanac’s previous coverage of the project reporting on the development here and here). Some local residents are also concerned about the project’s ties to Russia’s elite. 

“There’s a lot that raises red flags,” said Councilmember Drew Combs at the Sept. 10 protest. The protest was attended by Combs’ opponent Vamsi Velagapudi, Menlo Park Mayor Betsy Nash and Councilmember Jeff Schmidt.

Tensions over the project escalated earlier this summer in a spat between city and state. On July 29, California Attorney General Rob Bonta sent a warning letter to Menlo Park saying the city violated state law by requiring the developer to pay certain fees and accused the city of using new reasons to find the project inconsistent with design standards. Mayor Nash has responded by inviting Bonta to visit the site of 80 Willow Road, The Almanac reported. 

A spokesperson for the Attorney General’s Office said that the letter focuses on the city’s handling of 80 Willow Road application, and that it speaks for herself. The spokesperson did not reply to questions about the development’s Russia ties, and said the office is responsible for enforcing state housing laws. 

The development was proposed in 2023 under “builder’s remedy,” a state housing policy that allows developers to bypass local zoning laws when they are out of compliance with the state’s housing element process. Builder’s remedy is sometimes used as a tool by developers to propose larger developments than local laws would otherwise allow, and some of those proposals have been controversial. In Palo Alto, a development at Mollie Stone’s was approved by City Council in May. The three-building project was scaled back from 17 to 14 stories after years of community criticism and successful negotiations between the developer and a City Council subcommittee. And some Menlo Park community members believe the Willow Park to be a misuse of builder’s remedy. 

Developments like Mollie Stone’s were “pushing the envelope,” Combs said. “This one blows up the envelope.” 

Others are not convinced that the concerns are in good-faith, but are simply NIMBYism in another flavor. Matthew Lewis, director of communications of the pro-housing advocacy group California YIMBY, said that some entities start from an anti-housing perspective and “reverse engineer” all the arguments that could be used to oppose a development. 

“Is Menlo Park really worried about foreigners with lots of money?” said Lewis. “I’d look at Sand Hill Road on one end, I’d go down the street towards Meta… There’s some overseas money in Menlo Park. So gosh, maybe they just need to look into all of it.” 

Here’s what we know so far about the project’s owner, financing and developer, and what comes next. 

Who owns 80 Willow Road, the site of the proposed Willow Park development?  

The development at 80 Willow Road, the former campus of Sunset Magazine, is owned by Willow Project LLC, according to city documents. Willow Project LLC was registered in Delaware on Feb. 8, 2018, and the LLC purchased the development in May 2018 from Deutsche Bank and Embarcadero Capital Partners. 

The Wall Street Journal has reported that Russian businessman Vitaly Yusufov was the sole owner of Willow Project LLC. (The Almanac could not independently verify this.) The property was bought for $72 million, public records confirm, and the transaction was reportedly all-cash. 

Prior to the 2018 sale, Deutsche Bank’s U.S. reputational risk committee initially declined to approve the sale of the property to Yusufov, citing the political climate, the possibility for additional sanctions on Russia and other risks, the Wall Street Journal reported. That decision was later overruled by Deutsche Bank executives, including its chief risk officer, who said the risks of the deals were not enough to decline its approval. The deal was finalized in May 2018. 

What are Vitaly Yusufov’s connections to the Russian regime? 

Vitaly Yusufov is a Russian businessman and the son of Igor Yusufov. The Yusufov family has extensive financial and business ties with Dmitry Medvedev and the Medvedev family, the Russian investigative outlet Proekt reported in 2022. Proekt is a Russian-language publication whose reporters operate in exile; the publication’s editor-in-chief and founder, Roman Badanin, was selected for the John S. Knight Journalism Fellowship at Stanford University in 2022. 

Igor Yusufov is a “long-time Kremlin insider,” according to Lautman, the senior fellow at the Center for European Policy Analysis. Lautman, who is Ukrainian and Russian, has studied both countries and its powerbrokers for years. She wrote in a Substack post that the Yusufovs have been described as financial proxies, or “wallets” for the Medvedev family, and the Yusufov name has appeared on businesses, investments and other assets that are held or managed in the Medevdevs’ interests. 

“This is not just a powerful Russian family, which is bad enough on its own,” said Lautman in an interview. “This is a family that moves money for Medvedev, and Medvedev is probably (the) number three in Russia.” 

Proekt’s reporting also suggests that Dmitry Medvedev is involved with the 80 Willow Road property. 

“A source well familiar with the Yusufov family’s business says this investment was also made in the interests of the Medvedev family,” Proekt reported. The reporting, originally in Russian, was translated to English. 

The Palo Alto Weekly reported in 2010 that Medvedev spoke at Stanford, visited businesses on California Ave and expressed a desire to build a Silicon Valley in Russia. Medvedev, who served as president of Russia from 2008 to 2012 and as prime minister from 2012 to 2020, currently serves as deputy chairman of Russia’s Security Council. According to Proekt, Medvedev transitioned from a perceived liberal during his presidency to an anti-West war hawk following Russia’s 2022 invasion of Ukraine. In recent years, he has repeatedly referenced Russia’s nuclear capabilities in various threatening comments made to the U.S. and Europe. 

“The guy is threatening to nuke us every other Tuesday,” said Lautman, referring to public posts made on Medvedev’s X and other social media. “He’s going to nuke America or nuke London or nuke France. He’s always threatening to nuke somebody.” 

Medvedev was sanctioned in April 2022 by the United States and numerous other European countries. Neither of the Yusufovs are sanctioned by the United States, though Igor Yusufov is sanctioned by Ukraine and Canada. But Lautman said that sanctions of individuals like Medvedev are ineffective if their wealth can continue to operate via financial proxies. 

“(Dmitry) Medvedev, for instance, is sanctioned, but then you have someone like Yusufov, who is not sanctioned,” she said. “So Medvedev doesn’t buy the property or build skyscrapers, but his frontman does. And the fact that you have people turning a blind eye to that is the reason that sanctions have not worked as they should.”

According to Lautman, Russian investment in the U.S. and Europe is not a new phenomenon. It dates back decades, gaining momentum during the economic reforms of perestroika in the late 1980s and accelerating after the collapse of the Soviet Union. Lautman said that elite Russians have “creative ways” to move money outside of the country – art, Hollywood films, charities or the stock market. But real estate is an investment that is unlikely to depreciate in value – especially in Silicon Valley. 

“They need to get money out, and real estate is a very safe place to put it in,” Lautman says. “This legalizes it. You can’t exactly walk in with $100 million or $10 million in a suitcase, but you can put it in real estate, and that helps normalize the money.” 

Who is the developer of the project? 

Oisín Heneghan is the founder of N17, the real estate and construction firm that is spearheading the project. Heneghan, who is originally from Ireland, obtained a masters in engineering from Stanford University in 2004. He spent several years at commercial real estate company Trammell Crow before founding N17 in 2023. N17 company has submitted applications for several projects in San Francisco in addition to the Willow Park development in Menlo Park.

Heneghan declined an interview, but replied to some questions over email on the vision for the Willow Park development. 

“We are facing a generational housing crisis that has put homeownership—and renting in good neighborhoods, with good schools—out of reach,” Heneghan said in the email. “If we want to make a meaningful difference, we have to build projects large enough to actually move the needle. N17 is creating a new neighborhood center for Menlo Park—one that serves the people who live at Willow Park, and that serves as a hub of amenities welcoming to the wider community.” 

Heneghan also replied to the criticism about the size of the project. 

“The people who complain most loudly about new housing and traffic are remarkably quiet when hospital workers are sleeping in their cars or when the workers who serve them are commuting three or four hours a day,” he said. “A community cannot remain vibrant if the next generation cannot afford to live there.”

Menlo Park councilmember Combs, who attended the Sept. 10 protest, said N17 “doesn’t have a track record” to construct the development as it is proposed, and the project has “no real logic.” 

“I question the developer’s grip on reality,” Combs said. “But that does not mean that we don’t take it seriously.” 

Heneghan pushed back, noting that N17 has been ranked among the top commercial real estate developers by the SF Business Times, by square footage of developments in their pipeline. He added that N17 has recently received approval for a 40-story development at 180 Hawthorne and a 33-story building at 598 Bryant St, both in San Francisco. Heneghan said the two projects were the first in California to use AB 1287, a new state law that allows developers to stack density bonuses in exchange for additional affordable housing.

Heneghan declined to answer repeated inquiries about N17’s relationship with Vitaly Yusufov. 

Who else was involved in the 2018 sale of the property? 

Robert C. Barnes is listed on the 2018 grant deed as the person to whom the recorded deed should be mailed to. Barnes is an attorney at Norton Rose Fulbright, a large global law firm. It is not clear what role Barnes played in the transaction, and he did not respond to a request for comment. The mailing address lists a Los Angeles office of Norton Rose Fulbright. 

Eric Yopes, a co-founder and principal of Embarcadero Capital Partners, was an authorized signatory for the grantor — the seller — in the 2018 sale, according to public records. 

What’s next for 80 Willow Road? 

According to the city’s project page for the development, Menlo Park staff continue to process the Willow Park development application at 80 Willow Road. Nash told The Almanac she is hoping to discuss this issue in an open city council session later this month. Nothing has been scheduled at this time, though the council has met in closed session to discuss the issue. 

N17 has said the project must be approved by Oct. 27, or it will file a lawsuit against the city. In his newsletter, Combs wrote that he thinks the city has two options: stay its course and decline to change its approach to the project, likely drawing a lawsuit from N17. Or the city could approve the project, which could possibly draw litigation from residents. 

If the city approves the project, Combs stated that the development would still need a building permit to move forward – a process that Combs thinks will require “millions” of dollars in analysis in order to get a buildable project, he told The Almanac. 

In either case, he views litigation as likely inevitable. 

“The choice may not be between approval and litigation, but what role we want the City to play in that litigation,” he wrote in this newsletter. 

Editor’s note: Arden Margulis contributed to this report. This story was updated to include others who attended the Nov. 10 protest. Please send questions and comments to editor@AlmanacNews.com. 

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