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Menlo Park is being threatened with competing lawsuits from groups in favor of and in opposition to the city’s plan to place affordable housing on three city-owned lots downtown. A pro-housing group has told the city that it will face litigation if it does not move forward with its plan, while lawyers representing several downtown property owners have let the city know that they plan to pursue legal action if the city does move forward with the plan.
The council is slated to decide whether or not to move forward with requesting proposals from developers for the three lots at its Tuesday, Jan. 14, meeting. The council was originally slated to begin accepting proposals from developers in November 2024, but voted to postpone the request for proposals after dozens of residents and business owners expressed concerns about the proposal, and told the council that they had not been properly notified about the plans for the downtown lots.
The plan to build affordable housing on the city-owned lots in downtown emerged as part of the city’s planning process for its most recent state-mandated housing plans. The city is required by the state to plan to build 2,946 units of housing to be constructed between 2023 and 2031.
Pro-housing group threatens legal action if plan doesn’t move forward
YIMBY Law, a pro-housing legal nonprofit, sent a letter to the Menlo Park City Council on Jan. 3 threatening legal action against the city if the council does not move forward with its plan to place housing on three city-owned lots downtown. The group argues that the city is already falling behind its promised timeline for constructing affordable housing downtown, and is therefore in violation of state housing law.
“Menlo Park’s certified housing element makes specific commitments about surplus housing on city-owned parking lots,” the letter from YIMBY Law, signed by the organization’s executive director Sonja Trauss reads. “Despite the text of this policy and its significance to the housing element, Menlo Park has not followed through.”
In its housing element, Menlo Park established yearly milestones for its downtown parking lot affordable housing program. The city committed to conducting a feasibility study by 2023, issuing a request for proposals for housing development by 2024, completing development entitlements by 2025 and seeking to complete the development of 345 or more units of affordable housing by 2027.
“At this point, the city is ignoring both the text and timeline of its own commitments, which is not allowable under housing element law,” the letter reads. “The housing element deadline for RFP issuance has passed; as such, a court or California HCD (Department of Housing and Community Development) could find the city out of compliance with housing element law.”
In a comment letter on the draft housing element sent to the city on June 10, 2022, YIMBY Law asked the city to commit to “specific timeframe and objectives for housing unit production” on the downtown lots.
The Jan. 3 letter goes on to say that if the city continues to delay the timeline for the parking lot program outlined in the housing element, the city may be open to so-called “builder’s remedy” applications that would allow developers to bypass local zoning entirely, and that it “opens itself up to litigation that YIMBY Law is willing to pursue.”
According to YIMBY Law’s website, the organization operates by identifying housing law violations, notifying local governments of noncompliance and suing municipalities that fail to correct noncompliance issues. The organization has won judgments against several municipalities in the Bay Area, notably Millbrae (over the county’s plan to convert a La Quinta Inn to affordable housing) and Cupertino (over the city’s late housing element). The organization has filed suits against several other cities with noncompliant housing elements.
In an email to this news organization, Kendra Calvert, a spokesperson for the city of Menlo Park, said that the city committed in its housing element to “conduct studies to assess affordable housing on downtown parking lots.”
“State housing element laws require cities to pursue the programs and policies in their housing elements or risk decertification,” she said. “The city is continuing to pursue all programs and policies of its housing element. This includes a City Council agenda item on January 14, where the City Council will consider releasing a (request for qualifications for developers) regarding development of affordable housing on downtown parking lots.”
Proposed development is ‘unmitigated disaster,’ critics argue
The city has also received letters from representatives of several property owners threatening to pursue legal action against the city if it opts to declare the three parking lots “exempt surplus land” — a legal step the city must take before it is able to use the parking lots for housing.
“From the perspective of my client and the business tenants operating on Santa Cruz Avenue, the proposed redevelopment will create an unmitigated disaster,” wrote attorney Brian McSweeney, who represents the owners of 654-656 and 700-704 Santa Cruz Ave., in a Jan. 3 letter to the council.
McSweeney argues that because the city’s acquisition was financed by a special assessment district on neighboring property owners, and as the land was acquired by the city specifically for use as public parking, the city cannot declare the land as “surplus” without extensive impact studies.
The letter goes on to say that his firm plans to take legal action against the city and the council if it moves forward with the project as proposed. This news organization reached out to McSweeney for comment but have not yet received a response.
A similar letter sent to the council on Jan. 7 by attorney Norman Matteoni argues that the city cannot lease the property or use it for purposes other than parking without the agreement of the property owners that paid into the special assessment district. Matteoni represents the owners of 1149 Chestnut Ave., which houses Coffeebar, and says that the owners of the property are opposed to the lot’s conversion to housing.
“In 2016, the owners of the property … remodeled the building at substantial cost,” Matteoni wrote. “The building’s primary entrance is now oriented to the parking lot. The owner acted in good faith reliance on the continued existence of adjacent parking for which it was assessed.”
This news organization reached out to Matteoni for comment but have not yet received a response.
Additionally, the city has received a public records request from law firm Rutan & Tucker asking for all city communications about declaring the parking lots to be “surplus land,” all documents relating to the establishment of special assessment districts for the parking lots, bond issues to raise funding for the parking lots, any analyses the city has conducted on the downtown lots and more. The request also asks the city to produce all communications with HCD regarding the city’s housing element adoption.
The records request letter does not state whether or not Rutan & Tucker plans to take legal action against the city based on the results of the records request. The firm has not yet responded to requests for comment.
The council plans to vote on whether or not to move forward with requesting proposals from developers for the three lots at its Jan. 14 meeting at 6 p.m. The meeting takes place in Council Chambers, 751 Laurel St., and on Zoom.
I think you have a typo in paragraph 4 where you say they will be sued if they don’t place parking on the parking lots. I think you meant housing.
Thanks for the catch Dawn! It has been remedied.
Thanks for all your work! Local news is our last best hope.
Well said, @Dawn1234, and thank you, Eleanor!
The Plot Thickens.
The City is NOT about to send a request for proposal (RFP); it wants to send a Request for qualification (RFQ). The RFQ is used (a) to qualify developers who could design and construct the Downtown Affordable Housing Project (“Housing Project”) and (b) determine their initial interest in submitting a design and construction bid.
January 13, 2025 Update: On January 10, 2025 Rutan & Tucker LLP sent the Menlo Park City Council a letter that challenges the City’s claim of ownership rights for the land it intends to declare as surplus. The letter is available at https://drive.google.com/file/d/1euagqwLtX6slTQVsT0RGjxID8KuP2tmj/view?usp=share_link
Rutan & Tucker’s Litigation and Government Relations and Regulatory attorneys represent Northern California public entities as well as contractors, subcontractors and real estate developers and owners in all areas of public policy, regulatory and political arenas as well as provide counsel on land use and environmental law.
The hypocrisy of the same Menlo Park brain trust simultaneously using taxpayer dollars trying to stymie a commercial developer from using private investment funds to develop the 80 Willow project at the same time they are trying to use taxpayer dollars to develop lower density housing on tax payer purchased land, in downtown is laughable.
No doubt the CEQA “consultant” they hire for 80 Willow will find ancient burial ground, historical significance to the dirt, an endangered species nesting sites and a dozen other reasons to prevent private investors from risking their money to move forward.