Search the Archive:

Back to the Table of Contents Page

Back to The Almanac Home Page


Publication Date: Wednesday, August 28, 2002

GUEST OPINIONS: Business owner, council member square off on M-2 zoning plan GUEST OPINIONS: Business owner, council member square off on M-2 zoning plan (August 28, 2002)

PRO: Why changes are needed in the M-2 zone PRO: Why changes are needed in the M-2 zone (August 28, 2002)

By Paul Collacchi

Menlo Park might soon update its zoning rules, eliminating a loophole that allows oversized, high-density offices to crowd-out light industrial uses and warehouses in the eastern half of the city. City Planners call the commercial area east of Highway 101 the "M-2" district.

The phenomena of high-rent offices crowding out beneficial lower-rent uses in M-2 is similar to events downtown where the Park Theater and Menlo Hardware are being crowded-out by rent pressure from offices along El Camino.

For M-2, the primary goal of Menlo Park's general plan is to expand diverse light industrial uses that increase sales tax without generating much traffic or adding new pressure to build housing. In M-2, high-density offices are already crowding-out Menlo's existing sales tax producers and may permanently eliminate any chance for new ones to return.

Compared to the average high-density office, the average light industrial use generates significantly more sales tax. High-density offices generally don't generate sales tax. Both uses generate equivalent property tax, but since Proposition 13, commercial property tax no longer contributes much to the city's revenue.

The long-term financial benefit to Menlo Park of an alternate future that contains light industrial uses instead of high-density offices could be as much as $8 million yearly in increased revenue and reduced costs.

A recent financial analysis conducted by staff using sophisticated modeling and actual sales tax data shows that if large, high-density offices continue to replace industrial uses in M-2, current revenues will decline and city costs will increase. The net loss would reach nearly $2 million per year. If current industrial uses are expanded, Menlo Park could eventually increase its revenue stream by more than $6.2 million per year.

Converting to high-density offices will also double the number of employees in M-2 to a whopping 50,000, creating more traffic and increasing our jobs/housing imbalance to intolerable levels. Under state law, Menlo Park must add 900 housing units to its zoning code to reduce the current housing deficit.

Doubling employees in the M-2 zone would create tremendous new pressure to build high-density housing throughout the city, negatively impacting our schools and recreational facilities.

Cities can create balanced, healthy development with their zoning code.

Currently, the M-2 office loophole permits high-density offices nearly twice the size of those permitted elsewhere in Menlo Park. The proposed change would reduce or eliminate high-density offices in parts of M-2 while permitting low impact offices to be built at densities allowed elsewhere in Menlo Park. The proposal leaves industrial and warehouse sizes unchanged.

The city has been working on M-2 zoning since the city-wide office rush began in 1997. The proposed change culminates a five-year process that includes the Smart Growth public workshops, and would replace a temporary zoning measure adopted in 1998. The city worked with several large property owners and incorporated their changes for their properties.

I believe this is one of the wisest and most beneficial changes we can make to financially strengthen Menlo Park and prevent harmful impacts from over-development.

Paul Collacchi is a member of the Menlo Park City Council.

CON: Action smacks of downzoning when city should be helping business

By Tom Johnson

There's a recession on. The Dow is down, the Nasdaq is down, companies are folding, lay-offs are regular occurrences. Our 401k's have become 201k's. We've got it. We're clear. We don't need any more evidence to understand it. There's a recession on.

But apparently, the evidence isn't quite compelling enough for the Menlo Park City Council. Even in these troubled times, some of the members of the council are proposing to make it harder for businesses to expand their sites, hire new people and invest in the local economy. Maybe they need to see AOL Time Warner, Chevron/Texaco and Intel all go out of business before they catch the hint.

Here's what's afoot: the Menlo Park City Council is proposing to downzone certain areas of East Menlo Park. The zoning changes would discourage and in some areas prohibit the types of businesses and development currently allowed in East Menlo Park. If this passes, and a law firm decides to hire more attorneys and support staff and expand their headquarters, they most likely can't. If this passes, and a manufacturing tenant moves out of a building, a professional tenant won't be allowed to move in, even if the owner wants them to sign the lease. In short, if companies want to invest in East Menlo Park, the council is trying to make it harder for them to do so.

Let's all take a trip back to Economics 101, and remember some of the ways that recessions end: consumer confidence is restored. Private investment is increased. (Sometimes even government spending is employed, but that's not something we should count on.) With Peninsula unemployment rates at an x-year high, with people relocating away from the area in search of work, and with tax revenues to our region falling, do we really want to tell businesses that want to grow today to go away? That¼s madness.

Does Ravenswood School District have all the resources it needs to educate our kids? Does Menlo Park have sufficient money to keep our streets clean and our city safe? Are we all doing so well that we can tap into our rainy day funds? Clearly, the answer is no.

One voice of sanity on the council, Nicholas Jellins, is fighting this proposal. However, with our council dominated by no-growthers devoted to creating more hoops to jump through for businesses and more controls on land use, this proposal is likely to pass, unless the community speaks up.

Some business owners, like myself, along with some of the community members in Belle Haven, are speaking out. We're telling the council that enough is enough. The Smart Growth outreach that the council performed a few years back went nowhere, and the message the council got from that exercise seems to be "don't bother informing the community about our activities." We're appalled that once again, the council is choosing to impose its vision on us without asking the opinions of the people who create the revenues that let this city run.

This downzoning proposal is shortsighted, disruptive, and will slow our city and our region's recovery from this economic recession. It's something the City Council should not be doing. Perhaps Sun Microsystems will go out of business in the next couple months, and they'll realize that discouraging investment is a bad idea, but hopefully it won¼t take further economic catastrophes to get them to see the light.

I urge you to call your council members and tell them that you want them to do outreach and economic studies before they further tighten the collar around business's neck. I urge you to call Councilman Jellins and tell him to keep up his principled leadership on the downzoning issue. I urge you to get involved with our business and community coalition, the Belle Haven Partnership, to fight these changes. You can find us online at

Get involved. The future of Menlo Park depends on all voices being heard, not just those of a few.

Tom Johnson is president of Pacific Financial Printing, which is based on Campbell Avenue in the M-2 zone. Mr. Johnson lives in Hillsborough.


Copyright © 2002 Embarcadero Publishing Company. All rights reserved.
Reproduction or online links to anything other than the home page
without permission is strictly prohibited.