Bernstein calls for rejection of financial report on downtown plan

Menlo Park council begins specific plan evaluations

A relatively peaceful Menlo Park City Council discussion about the draft downtown plan on Aug. 30 was followed later that week by harsh criticism again targeting the plan's fiscal impact analysis (FIA) and calling for its withdrawal.

Educator Chuck Bernstein, who holds an MBA from Stanford University, asked the city to reject the FIA because of what he said were documented gross errors.

"I am requesting that you formally reject the FIA as both erroneous and incomplete, and withdraw it from further public consideration until it can be revised and rewritten," he said in a letter to the City Council on Friday, Sept. 2. "Based on the example that I have been able to explore below, it displays such ignorance of basic economic principles as to call into question not only all the other finding in the analysis, but also the calculations performed by Strategic Economics for the Specific Plan itself."

The example he cited involved the calculation of sales tax from retail sales expected to be generated by 2030 through implementation of the specific plan. The city had acknowledged the consultants forgot to subtract vacant space in their estimate, which then alerted Mr. Bernstein to other underlying potential mistakes. He said he'd also consulted two Stanford Graduate School of Business professors in his quest to clarify the method used to perform the calculations.

Mr. Bernstein emphasized that by his calculations, the plan would generate more revenue than reflected in the FIA. "I am not trying to attack the plan by delving into the numbers; I want to understand what the financial implications are," he wrote.

Rather than withdraw the report, Assistant City Manager Starla Jerome-Robinson said the city expects Strategic Economics to respond to the critique this week.

Council evaluation

Earlier in the week, during its Aug. 30 meeting, the City Council evaluated the Caltrain station area and southeast El Camino Real portions of the specific plan in a comparatively tranquil fashion.

Comparatively, because some interested parties raised objections. Stanford University challenged the specific plan's requirements for the vacant car lots it owns along southeast El Camino Real, while the council said the university needs to commit to developing the parcels, particularly with a hotel that could help financially support the specific plan's implementation.

Others, including Richard Draeger of Draeger's Supermarkets, voiced concerns about replacing portions of parking plazas with mixed-use retail developments.

Overall, the council's preliminary recommendations followed the tone set by the planning commissioners during a series of reviews held during the summer.

Among the highlights:

* Curb extensions, which allow sidewalk segments to spread into the street, providing a haven for pedestrians but an obstacle for bike and bus lanes, should be removed from the plan.

* Increase safety by installing quad gates at the Ravenswood and Oak Grove Avenue railroad crossing that would prevent drivers from attempting to cross despite the warning signal.

* Increase the upper-floor setback on Alma Avenue to 15 feet.

Click here to review all documents associated with the specific plan, including recommendations.

The council also supported the Planning Commission's request that the Finance Audit Committee prepare an executive summary of the FIA. According to Assistant City Manager Starla Jerome-Robinson, the committee will meet on Sept. 12 to compile the report.

Mr. Bernstein said the committee "should not waste its time on the present document."

Upcoming meetings of the council will focus on different areas of the draft plan: Downtown Menlo Park and the remainder of El Camino Real on Sept. 13, and the FIA along with public benefit during a last review on Sept. 20. Final versions of both the specific plan and environmental impact report may start circulating by winter.

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Like this comment
Posted by Hank Lawrence
a resident of Menlo Park: Sharon Heights
on Sep 6, 2011 at 10:15 am

I agree with Chuck. Also, the Council should consider hiring a more qualified consultant.

Like this comment
Posted by When the shoe's on the other foot
a resident of Menlo Park: Downtown
on Sep 6, 2011 at 12:17 pm

I find it interesting that Draeger's - after extorting the city into getting to use the public parking lot for their loading dock - is now concerned about the loss of parking spots downtown.

Like this comment
Posted by Edward Syrett
a resident of Menlo Park: The Willows
on Sep 6, 2011 at 3:11 pm

Mr. Bernstein's letter also noted that the consulting firm had a bad track record in work previously contracted by the City of Menlo Park, before being granted the contract to develop the draft downtown plan. Someone ought to investigate how this could have happened. Surely there are better-qualified contractors out there.

Like this comment
Posted by wap
a resident of Menlo Park: Felton Gables
on Sep 6, 2011 at 3:51 pm

Perhaps the City should seek more qualified personnel to evaluate and retain consultants. How many levels of City management is required? It use to be just one City Manager. What happen? No increase in population or demand for services.

Like this comment
Posted by Long time resident
a resident of Menlo Park: Downtown
on Sep 6, 2011 at 4:39 pm

Bernstein's review did not turn up any gross errors in the FIA. Let the consultant correct them and let's move on. Stop spending staff time trying to appease a person who campaigned against the plan.

The plan is what the citizens want. It was a very thorough process and most of the criticisms are coming from people who do not agree with the majority of Menlo Park residents.

Bernstein is trying to find ways to stop this imaginative and overdue plan.

Like this comment
Posted by workshop participant
a resident of Menlo Park: Allied Arts/Stanford Park
on Sep 6, 2011 at 5:55 pm

Long-timer, how do you know this is what the majority want? The many adverse impacts weren't known during the workshops. The consultant has created their version of the plan, but this wasn't available during he workshops and those details aren't known to hardly anyone. Draeger, for example, is complaining because the plan shows a new building in the parking lot between their store and Peet's!
The visioning process was long, but the devil is in the details and those are just recently available. The environmental impacts are huge, the plan is a financial loser unless there's at least one successful new hotel.
I'd say what's overdue is another workshop to talk about the details now that they are available. This time, with residents and local businesses only, not lots of out-of-towners.

Like this comment
Posted by chuckle-nomics
a resident of Menlo Park: other
on Sep 6, 2011 at 7:13 pm

Before we launch into new Chuck Bernstein "analyses", can we get closure on some of his wacky claims from the past? For example, his October Surprise during last year's council campaign where he said there was a hidden $3Million city budget deficit? See:

Web Link

Last I saw, the city hadn't gone broke, so they must be doing a great job of hiding it! Chuck can't be wrong, because he's got an MBA.

Keep in mind, this is the guy who admitted that his group had been "sabotaging" development proposals in the past, but pledged to stop:

Web Link

Good times!

Like this comment
Posted by another mba
a resident of Menlo Park: Central Menlo Park
on Sep 6, 2011 at 9:08 pm

And exactly how does taking Bernstein's words out of context apply to this situation? Methinks this ad hominem attack is occurring because the analysis is correct, and there is no way to dispute the facts -- including that the city's prior experience with this firm should have sufficed to knock them out of consideration.

I have spoken to a couple of planning commissioners and city council members about the FIA. Even if a project has had years of planning, as this one has, throwing in a crucial chunk of info at the last minute is never appropriate. Now that we have reason to believe the info is seriously flawed -- well, time to step back. Do we really want to rush into a plan that may have significant deleterious consequences for our city's wellbeing in the long run?

Bernstein is not 100% right by any means, but he nailed this one.

Like this comment
Posted by Garbage Collector
a resident of Menlo Park: Menlo Oaks
on Sep 8, 2011 at 11:23 am

There's an adage in computing that goes 'garbage-in, garbage out.'

It happened in the the High Speed Rail projections, and it happened in this 'Financial Analysis.'

It's unreliable; only addresses revenues/expenses after the project is fully built out. It ignores the costs to the city (and residents and businesses) to get the projects built: such as garages and underpasses.

I was astonished to see the same firm who was discredited in 2001 selected by the staff for this project. They must have assumed it was a different council without memory.

Like this comment
Posted by some facts
a resident of Menlo Park: Downtown
on Sep 8, 2011 at 4:13 pm

1. City staff did not choose the FIA consultant, they are a subcontractor of the Planning Consultants
2. The FIA consultant was not discredited in 2001, they quit when a Council member insisted that they release the names of people who had participated in CONFIDENTIAL interviews

Like this comment
Posted by Log Time Resident
a resident of Menlo Park: Downtown
on Sep 9, 2011 at 3:08 pm

There seems to be a thread of confusion running through the comments of people who oppose the plan. That is they keep referring to it as a'project'. It is not. It is 'specific plan' that acts as a guide for future projects that will each have to be carefully scrutinized.

For this reason the FIA is of limited importance and should not be the basis for killing the plan. As projects are proposed they will have to stand on their own and the financial impacts can be specifically and more carefully presented at that time.

Like this comment
Posted by actually
a resident of Menlo Park: The Willows
on Sep 9, 2011 at 4:20 pm

Long time resident, if the plan is accepted there won't be a mechanism to review the economics of individual developments that fit into the zoning ordinances under the plan.

Like this comment
Posted by Real Facts
a resident of Menlo Park: The Willows
on Sep 14, 2011 at 12:38 pm

Long Time Resident, for the purposes of CEQA, a Specific Plan is a "project". Future build-out will not be environmentally re-scrutinized so long as individual projects conform with what was analyzed in the Specific Plan EIR. Projects consistent with permitted uses under the zoning code would not need a use permit.

This is actually what builders want, and its the right way to do it, so its worth taking some time to get the plan and its analysis right, so that future development which conforms to the plan can be built with a minimum of review.

Economics are never subject to future review under either CEQA or under the Use Permit process.

Sorry, but further commenting on this topic has been closed.

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