Menlo Park: Boutique hotel may produce $600K in city taxes its first year

Is that enough to meet Menlo Park's "public benefit" requirements?

"Public benefits" was a refrain at the Nov. 16 Menlo Park Planning Commission meeting, this time with regard to Pollock Financial Group's proposal to build a four-story "boutique" hotel on a half-acre site at 1400 El Camino Real.

The issue: Should the city's 12 percent hotel tax count as the development's primary public benefit, which is given in exchange for allowing the developer to exceed the city's "baseline" building limit for the site?

In 2012, Menlo Park raised its hotel tax, known as a transient occupancy tax, to 12 percent from 10 percent in a ballot initiative, Measure K, that was approved by 74 percent of the voters.

The ballot measure stated that the tax would partially fill a $1.2 million revenue gap created when the state dissolved Menlo Park's redevelopment agency. That funding would be used "to maintain current City service levels for police, library, streets, sidewalks, storm drains, and parks and recreation facilities and programs," the measure said.

Jeff Pollock, vice president of Pollock Financial Group, said the hotel is expected to generate $8.5 million in transit occupancy tax revenue over 10 years, and approximately $600,000 in its first year.

Other public benefits include the developer's plan to pay for the installation of a dedicated right-turn lane from Glenwood Avenue onto El Camino Real. The hotel also would be LEED Silver certified, although, according Planning Commissioner Katie Ferrick, that level of sustainability is not much higher than California's current building standards.

New curbs, gutters and landscaping would be installed. Once in operation, Mr. Pollock said, the hotel would support local businesses, such as serving Beltramo's wine to guests.

Planning Commissioner Drew Combs noted that if the primary benefit were to be city income from the hotel tax, it might set a precedent for retail developers to think sales tax could count toward the public benefit requirement. Ms. Ferrick replied that the transit occupancy tax is "orders of magnitude" greater than other tax incomes for the city and constitutes a separate category that should count toward the development's public benefit requirement. "It's not a slippery slope," she said.

Even though the hotel's proposed architecture complies with the specific plan, questions were raised about whether it is too corporate or bland. Planning Commissioner John Onken encouraged the developers to go back to their architects, "crack the whip, and tell them we want it to really sing," referring to the building's design.

"Don't be afraid to go bold with this building and do something that's a little bit different," Planning Commissioner Larry Kahle said.

Mr. Pollock said he hopes to have the redesigned hotel plans resubmitted by Thanksgiving.

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12 people like this
Posted by whatever
a resident of Menlo Park: Central Menlo Park
on Nov 23, 2015 at 9:27 am

This is a joke right? The hotel tax as a pubic benefit from the hotel developers! Since when is a required tax voted for by the residents a "public benefit" use for someone else. Also how is using Beltramo wines a public benefit? The only one who benefits is Beltramos.
A turn lane? Not public benefits - but a very partial offset for all the new traffic the hotel will produce. New curbs and sidewalk - everyone has to do that with new construction whether it's a business or a single family residence. And how is LEED a public benefit.
Next thing you know he'll consider having a roof on the building to be a public benefit.
The audacity of the developer is unbelievable.
This developer should not be allowed to exceed the baseline building limit for the property no matter what they offer.

BTW how much traffic congestion and taking away of traffic lanes and pedestrian sidewalks will occur and for how long during construction? Developers should be made to compensate the city and citizens for those and that payment should in no way be considered a public benefit.

2 people like this
Posted by Betty T
a resident of Menlo Park: Central Menlo Park
on Nov 23, 2015 at 12:59 pm

II love the chain link fence that is there now. Here is a great project. Just say thank you to the developers.

13 people like this
Posted by Tantrums
a resident of Menlo Park: Downtown
on Nov 23, 2015 at 1:23 pm

Right now, developers know that they can sway public opinion by making their property as ugly as possible. Add a chain-linked fence and half the people in town will agree to whatever the developer asks "just take away that fence."

Every member of the council is a parent who's dealt with 2-year-olds and should know better than to fall for these manipulative tactics. Instead, the council should enact a blight-free ordinance that prevents property owners from resorting to these measures and in fact requires them to try to beautify the vacant land. Rented plants are inexpensive, especially in comparison to the profits that the developers are sure to reap.

P.S. Planning commissioners who got their day jobs through their connections to developers' attorneys should recuse themselves from any discussions involving those developers.

3 people like this
Posted by really?
a resident of Menlo Park: other
on Nov 23, 2015 at 1:43 pm

really? is a registered user.

Tantrums: Please name names and add some facts to your accusations regarding the planning commission. I don't think that that hotel has anything to do with Facebook?

And pick your toys up off the floor!

4 people like this
Posted by Dana Hendrickson
a resident of Menlo Park: Central Menlo Park
on Nov 23, 2015 at 1:43 pm

I still do not understand why our City does not require developers install screens on their vacant lot chain link fences. These would partially mitigate the eyesores BEFORE construction starts. It seems to be a reasonable demand easily implemented by our city council.

7 people like this
Posted by Beltramo's
a resident of Menlo Park: Downtown
on Nov 23, 2015 at 2:35 pm

CORRECTION: Please note that no discussion has occurred between Beltramo's and the Pollock Financial Group regarding the serving of Beltramo's wines at the hotel as was stated in the article above. Furthermore, it will be more cost effective for the hotel to purchase their wines through wholesaler's versus a retail store.

8 people like this
Posted by Downtowner
a resident of Menlo Park: Central Menlo Park
on Nov 23, 2015 at 3:34 pm

It seems that MP is being swayed by promises of big tax revenues & now tries to convince residents that they'll get "public benefits" from this project. As stated by "whatever" above, any building project, whether residential or commercial, has to put in sidewalks & curbs.

Apparently the Pollock Group has managed to convince the the MP Planning Commission that a 64 room hotel with inadequate parking on a 1/2 acre site is beneficial for the town. I foresee added congestion on already impacted surrounding streets. That intersection is one of the busiest & most congested in town as students & parents travel through it to Menlo School, St Joseph's Elementary, Sacred Heart Prep, and Hillview Middle Schools.

The lure of lucre will get MP to agree to just about anything, apparently.

6 people like this
Posted by long time resident
a resident of Menlo Park: Central Menlo Park
on Nov 23, 2015 at 4:34 pm

Our Planning Commission and our elected Council Members seem to welcome all development,and especially ones with a promise of planned tax revenue. Most all will be gone when the planned tax revenues do not meet the estimates, when the congestion on the corner is worse, and when city services to the hotel become a financial burden. What about water, what about sewage treatment ?? Good luck.

3 people like this
Posted by SteveC
a resident of Menlo Park: Downtown
on Nov 23, 2015 at 5:58 pm

SteveC is a registered user.

I see the party of no is getting active again. Complain about any and everything.

7 people like this
Posted by Menlo Voter
a resident of Menlo Park: other
on Nov 23, 2015 at 7:43 pm

Menlo Voter is a registered user.

More claims of "corruption" without a scintilla of evidence yet again.

2 people like this
Posted by Follow Specific Plan
a resident of Menlo Park: South of Seminary/Vintage Oaks
on Nov 23, 2015 at 8:37 pm

Good for Commissioner Combs for raising the issue of precedence. Finally, an attorney who is thinking ahead. That's what good attorneys do: advise clients of the possible downsides when decisions are being made. I read that Combs has a degree in Urban Planning. Between his background and the experience of the architects on the Commission, the City should get a good project out of Pollack's development.

If the hotel guests pay the tax, what is it then that the developer contributes to the City? Had the City thought hotel tax was to be a public benefit, it would have been included in the specific plan as such. The city continues to make up the rules as it receives applications for development projects. Why did the City spend over $1 million for the specific plan if it was to be ignored, overruled and misinterpreted?

Planning Commissioner Ferrick was on the Planning Commission during the creation of the specific plan. She, of all people, should be following the document carefully. Now, how was it that Ms. Ferrick got her job last year at LinkedIn? Is this the implication being referred to by "Tantrums"? I don't see the connection.

2 people like this
Posted by Dana Hendrickson
a resident of Menlo Park: Central Menlo Park
on Nov 23, 2015 at 8:42 pm

It is very strange that there is uncertainty as to whether a hotel room tax is or is not a public benefit.

How is it possible that this is unclear?

2 people like this
Posted by Quid pro quo
a resident of Menlo Park: Allied Arts/Stanford Park
on Nov 23, 2015 at 10:55 pm

Hotel taxes are a nice side benefit but the point of public benefit bonus was a quid pro quo for the upzoning at Bonus level. More negative impacts for community at bonus level. The developer gains more at bonus level so should help pay for public improvements. In hotel case, the developer isn't paying the hotel taxes. The hotel guests do. It is fair to expect some additional benefit from the developer in exchange for being allowed to build a larger project.

4 people like this
Posted by Palo Alto Neighbor
a resident of another community
on Nov 23, 2015 at 11:38 pm

It amazes me that a community that loves to wine and dine at Rosewood on Sand Hill, can't agree to another new hotel project closer to town. Hotel guests would wander onto Santa Cruz Ave to shop, dine in restaurants and breathe some life into the Menlo Park downtown. They could even leave their cars at the hotel! I'd think the only thing Menlo Park residents would complain about is the statement made by Planning Commissioner Kahle, "Don't be afraid to go bold with this building and do something different." Menlo Park buildings aren't known for being different. Are you sure voters want to go bold? What does go bold and different mean to a developer? Playing it safe might be the best way to roll.

3 people like this
Posted by Downtown-err
a resident of Menlo Park: Downtown
on Nov 24, 2015 at 7:48 am

so what public benefit does Drew want for the project?
another coffee cart like he approved as public benefit at 1020 Alma?

well a coffee cart would make this project really sing....

no coffee cart? that's insane. forget the annual 600k in tax and great restaurant on El Camino. forget business travelers who will support downtown restaurants. people really want the public benefit of another coffee cart.

way to go Drew. you got your sound bite.

2 people like this
Posted by logic lover
a resident of Menlo Park: Central Menlo Park
on Nov 24, 2015 at 8:07 am

Mr/Ms Err, could it be that Drew Combs was taking his responsibility as a commissioner seriously in questioning the logic, and the longterm consequences, of calling a tax a legitimate "public benefit" in exchange for being allowed a bigger project?

My question is, why did the other commissioners not seriously address his question? Ferrick's comment is a disappointing dance around the issue, and others seem willing to drop the ball on an important issue that can have longterm -- yes, precedent setting -- effects.

BTW, I hope your snarky sound bite at least had some tonic effect on you. It certainly didn't help the tenor of this discussion.

2 people like this
Posted by really?
a resident of Menlo Park: other
on Nov 24, 2015 at 8:24 am

really? is a registered user.

I think the argument put forward by the developer was that without going to the bonus level, this project would be a non starter. So was he holding the Council hostage on the idea that nothing happens unless he's given lots of slack? Or is this the real economics of MP real estate?

At the end of the day, we need more hotel rooms as any metric can tell you, and it's cash in the bank for our Council and community services. And this hotel project provides a high-end product that I'd much prefer over an Econo-lodge or the crappy offerings across the street and nearby. So what's the objection?

1 person likes this
Posted by Downtown-err
a resident of Menlo Park: Downtown
on Nov 24, 2015 at 8:39 am

watch how Drew votes when the project comes for approval.

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

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