How development rights might work for Park Theater How development rights might work for Park Theater (March 17, 2004)

By Toni Stein

Some members of the community have raised concern about Menlo Park engaging in a city-sponsored "subsidy" of the Park Theater. I want to clarify some key points.

"Transfer Development Rights" (TDRs) are by no means a form of subsidy and we should not use these two terms interchangeably. The authoritative book by Rick Pruetz, "Putting Transfer of Development Rights to Work in California," offers an excellent resource.

To quote Mr. Pruetz, "The technique of transferable development rights, or TDR, allows development rights which are unused on one parcel of land to be severed from that parcel and transferred to another parcel. . . Communities benefit from TDR because they can preserve important resources at minimal expense. Likewise, landowners and developers can benefit from TDR because they can make a profit from the transfer, even though some of the property involved remains undeveloped."

Mr. Pruetz notes that there are numerous case studies that prove that "TDR programs can be relatively simple to implement, instead of being 'legally complex and or logistically burdensome.' "

In the case of the Park Theater, preserving the use and structure is important to the community. If a broad consensus for preservation exists, considering TDRs makes sense.

Here is one way they might work. The city could establish a rules-based policy to look at the Park Theater (and other potential parcels) to decide on a transfer ratio to multiply the unused development square footage on the Park parcel for a receiving site to use.

This would mean that if the Park were to be preserved at the square footage it is today, then because it is less then the maximum square footage permitted in its zone, then with TDRs the landowner could convert the undeveloped square footage from the site into Development Credits that could be banked and later transferred to a "receiving site," elsewhere in the city and used for development at the receiving site.

Development credits from the Park could be sold to another landowner in Menlo Park. For example, one of many possibilities the city could define for itself is that the Development Credits could be transferred to other properties, say in the near downtown area just south of Santa Cruz Avenue where there are a number of aging apartments that are in need of redevelopment. The landowners receiving the credits would likely be willing to buy the credits since they would like to redevelop their properties but the current zoning prohibits any greater density then what they now have.

Redeveloping this apartment district with a small increase in density could be a win-win situation for the Park landowner, the city and the apartment district. In the apartment district it could lead to slightly more affordable housing and greater opportunity for landowners to improve return on their investments in this zoning district.

And for the city it could bring housing opportunity near downtown where amenities are close by. The city could define any number of rules as to where development credits could be transferred and sold.

I hope that Rick Preutz's book will help the city learn more about the potential opportunities for using TDRs in Menlo Park.

Toni Stein lives in Menlo Park and has served on the Planning Commission.

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