News

Facebook willing to pay Menlo Park $15 million-plus for company's expansion

 

Menlo Park could reap more than $15 million in one-time payments and contributions and hefty annual payments from Facebook if it decides to accept the terms of a development agreement with the social media company outlined in a staff report released July 14.

Among the benefits the city could receive are subsidized rental housing for 22 teachers, public safety officers or nonprofit workers; $1.25 million a year in hotel taxes; $1.5 million to start a "Housing Innovation Fund"; and continued funding to research and further plan transportation improvements on the Dumbarton Corridor.

"I think it's fair and I'm happy with how the negotiations went," said Vice Mayor Kirsten Keith, who with Mayor Rich Cline was part of the subcommittee that negotiated for the development agreement.

If the terms in the development agreement are approved by the City Council, the city would give Facebook the right to build two office buildings totaling 962,400 square feet and a 174,800-square-foot, 200-room hotel in the city, knocking down several of the former sites on the TE Connectivity campus, located roughly along Bayfront Expressway, Constitution Drive and Chilco Street.

Facebook designs show the company intends to create a publicly accessible open space between the two office buildings with a bike and pedestrian bridge over Bayfront Expressway, with access to Bedwell Bayfront Park and to the Bay Trail.

The city would have to amend its zoning to allow the new Facebook buildings to be 75 feet tall – where now the permitted building height is capped at 35 feet – and to reconfigure the properties so that the buildings can be adjoining.

The development agreement would also permit Facebook to cut down 274 heritage trees.

In exchange for those permissions, Facebook would pay as a public benefit $300,000 per year for 20 years after the first office building is occupied as a public benefit, and $336,000 per year – four times the amount of sales tax historically generated from that site – until TE Connectivity, Facebook's current tenant on the site, leaves.

That annual $336,000 fee would rise to $1.25 million per year two years after TE Connectivity leaves the site. According to Kyle Perata, senior planner, that increase is an incentive for the company to build its proposed hotel and start generating hotel taxes for the city.

According to the development agreement, Facebook would also provide a number of other benefits in the areas of housing, transportation, community services and the environment. If all the proposed buildings are constructed within 10 years, Facebook's project would add about $2.1 million per year to Menlo Park's revenue, according to the staff report.

"It's our responsibility to provide public benefits that are responsive to community priorities and assist with finding solutions to address regional challenges related to housing and transportation," said John Tenanes, vice president of global facilities and real estate at Facebook. "We want to continue to build social value and grow responsibly in the city of Menlo Park."

Housing

Facebook would subsidize the rents of 22 units at 777 Hamilton Ave. a new market-rate development by Greenheart Land Co., paying $430,000 per year for five years. Teachers would have priority as tenants, but public safety or nonprofit professionals could also be eligible.

Facebook would also have to abide by the city's Below Market Rate ordinance, meaning it would pay $6.3 million or build 20 affordable housing units in the city. According to Facebook officials who spoke at a Menlo Park Housing Commission meeting, there are talks underway with MidPen Housing to channel those funds toward a project by the nonprofit housing developer on the 1300 block of Willow Road.

If the Menlo Park general plan update now being developed goes through, the company would also commit to plan and design at least 1,500 housing units on its Prologis site, located on Willow Road, just south of Bayfront of Expressway, fifteen percent of which would be below market rate.

It would also put $350,000 toward conducting a housing inventory and local supply study with Menlo Park and East Palo Alto. Funds for the study would be bolstered with an additional $1.5 million to go toward creating a "Housing Innovation Fund" to implement recommendations from the study and $1 million to launch a pilot "Housing Preservation Fund," which would find and buy housing to "protect at-risk populations."

Transportation

Facebook would also contribute to the city's infrastructure and transportation initiatives. It would pay up to $1 million to fund future recommendations from the Dumbarton Corridor Study it has already funded with $1 million, and an additional $1 million toward a "forum" with Menlo Park and East Palo Alto to decide how to quickly implement those recommendations.

The company would also offer $100,000 toward a Transportation Management Association, which could involve working with other nearby companies to reduce the number of vehicle trips by employees.

In addition, Facebook would fund, up to $700,000, the design of a pedestrian and bike path between East Palo Alto and the Redwood City Caltrain station, and finish streetscape, bike and pedestrian improvements along Chilco Street.

Community services

Facebook would pay $60,000 per year to operate and maintain the Belle Haven community pool and would establish a scholarship program for East Palo Alto and Menlo Park residents, committing $100,000 per year for 10 years. It would also commit to pay $1 million toward the maintenance and operation of Bedwell Bayfront Park.

Environment

Facebook would pay $25,000 in seed money to fund a feasibility study for a recycled water system in the city's M-2 area east of U.S. 101. The company would commit to constructing its office buildings at "LEED Gold" the second-highest level of environmentally focused building standards. The buildings would have solar panels and an on-site recycled water system.

Editor's Note: Correction: A previous version of the story incorrectly stated that Facebook had committed to build at least 1,500 housing units on its Prologis site. The company has committed to plan and design those housing units, according to a Facebook spokesperson.

Comments

11 people like this
Posted by Resident
a resident of Menlo Park: The Willows
on Jul 15, 2016 at 12:13 pm

This is a very compelling set of public benefits. $2 million per year would allow the city to fund a lot of programs for residents. I also think the direct contribution of $1m towards the Belle Haven parks and $160,000 per year to help Belle Haven residents was a wise choice on the part of the city and Facebook - Belle Haven has been traditionally underinvested in and this is an opportunity to help them directly. And then there's all the other stuff Facebook is offering on top of that.

Balancing new jobs with new housing and transportation options nearby is the smart move.

If we ask for a lot and we get it, is our city prepared to take "yes" for an answer?



10 people like this
Posted by Happy Neighbor
a resident of Menlo Park: University Heights
on Jul 15, 2016 at 12:21 pm

I consider our town very fortunate to have an enterprise like Facebook here. They are demonstrating how to be the best corporate neighbor. Focused on housing, transportation, community safety, shared resources, public education and safety. No large corporate plan will ever be perfect for everyone but this may be the model other companies will look to for best practices for work-life balance and contribution to community. Go Facebook - glad you're here!


22 people like this
Posted by Not enough
a resident of Atherton: other
on Jul 15, 2016 at 12:32 pm

$15M is less than .5% of profit. They should $3-$5M annually for a minimum of 10 years. There will be tremendous demand on the surrounding cities. This burden should not be on the taxpayers for FB expansion and the absolute certain additional burden on the schools and roads.


13 people like this
Posted by Alan
a resident of Menlo Park: Belle Haven
on Jul 15, 2016 at 1:46 pm

How much will it cost to address the traffic problem?

Doing the full-blown Dumbarton Rail line across the Bay would probably cost $1 billion.

A smaller light-rail line, going to downtown Redwood City, would probably be $100 million.

Replacing the Willow Road / US 101 exchange is estimated to cost well over $100 million.

Other enhancements that could be done on, say, Bayfront Expressway? Who knows.

If they build housing in the area, the schools will be many $10's of millions of dollars.

Facebook should not be on the hook for all of this, or even most of this, obviously, but $15 million is extremely modest in the scheme of things.


6 people like this
Posted by Beth
a resident of Menlo Park: Central Menlo Park
on Jul 15, 2016 at 2:35 pm

I agree that the financial input from Facebook isn't enough. And how much of this will benefit Facebook itself, possibly at the expense of the many who use the Dumbarton passage. You know, those who increasingly can't afford to live on the peninsula, but provide services to our homes and businesses.

Every politician should wrap their head around the insane increase in numbers of people coming into this area, and their DAILY comings and goings. Consider the large Bohannon project along the same stretch. The road must be widened - will they give up their frontage for that? No?? Ah, there goes Bedwell Bayfront Park which is mainly a preserve and a jewel in this community as it's a refuge for many of us who use it.

I'm against the bike and pedestrian bridge which will serve the Facebook people mainly. It's already happening. Walking in the Park, along comes a line of 4 bicycles who don't budge nor break their conversation as they approached me. So the air, the energy and meaning for the Park will be put aside (Facebook and Bohannon will "pay" to pretty it up, put in bike and jogging lanes and completely transform it to their usage, their liking).

Do the Menlo Park politicos have the bravery to decide what they want, that serves all of Menlo Park and nearby communities?


Like this comment
Posted by Beth
a resident of Menlo Park: Central Menlo Park
on Jul 15, 2016 at 2:37 pm

Yes, I watched the bicyclists (I also ride) return to the FB campus.


15 people like this
Posted by HelloHanalei
a resident of Menlo Park: Suburban Park/Lorelei Manor/Flood Park Triangle
on Jul 15, 2016 at 3:32 pm

HelloHanalei is a registered user.

No matter how much money Facebook is willing to contribute towards housing, transportation, and other areas of impact (and I personally don't believe what they're proposing is remotely adequate), the fact remains that the demands on infrastructure, schools, housing stock, etc., brought about by Facebook's expansion, the Bohannon project, the Greenheart project, and other large proposed and planned projects, will be crippling. We live in a geographically limited area, so where, exactly, do the developers, corporate interests, and governmental entities pushing these plans think that all of the people who will pour into a finite area, with a finite amount of housing, school capacity, roads, water, and other resources, will fit? I feel like I'm living in a reality distortion field, where everyone is clamoring for development without looking realistically at the city they're proposing to contain all this activity. Menlo Park is not, and never will be, a major metropolitan area, and trying to cram too many people, too much housing, and too many cars into a city that wasn't designed or built for that kind of density is a recipe for disaster. When our kids are launched to college we'll be leaving the area, which is really a shame, because we have friends and roots here, and have loved Menlo Park for many years. But the direction in which the city is headed just doesn't seem to be positive at all.


17 people like this
Posted by whatever
a resident of Menlo Park: Central Menlo Park
on Jul 15, 2016 at 4:16 pm

No amount of money will make up for the environmental changes, impacts on infrastructure, roads, traffic, schools, housing costs, etc.
Also what is the impact on the climate for central MP when these big buildings go up and asphalt goes in? Changes to wind patterns off the bay which in turn raise temperatures for central and west MP residents?
Pollution, no matter what it's more cars, dust etc and no amount of green building eliminates it all.
Say no to FaceBook and its bribes!


Like this comment
Posted by Alan
a resident of Menlo Park: Belle Haven
on Jul 15, 2016 at 4:51 pm

Beth - just as an aside, the Ringwood Avenue pedestrian bridge was mandated to be rebuilt to serve the Menlo Atherton High School students; it was in the works before Facebook was a consideration. There's a bridge across Bayfront Expressway they're funding, and they may build a bike bridge parallel to the rail line bridge across US 101.


5 people like this
Posted by Menlo Voter.
a resident of Menlo Park: other
on Jul 15, 2016 at 5:18 pm

Menlo Voter. is a registered user.

For those that don't think what Facebook is offering is enough - HOW MUCH IS ENOUGH? They've offered a HUGE amount of money, more than anyone else and are trying to be responsible corporate citizens yet you think it's not enough. Seriously? Ok, they could just say eff you and do the minimum. Would that be ENOUGH for you? Jeezuz, no wonder businesses hate trying to do business in Menlo Park.


10 people like this
Posted by Peter Carpenter
a resident of Atherton: Lindenwood
on Jul 15, 2016 at 5:40 pm

Peter Carpenter is a registered user.

It is very telling that the City of Menlo Park, which is the Lead Agency for this project, negotiated a development agreement where 100% of the payments will go to the City and NONE will go to the other agencies like the Fire District and the School Districts that will be equally impacted by this project.

What a sad example of "leadership".


16 people like this
Posted by HelloHanalei
a resident of Menlo Park: Suburban Park/Lorelei Manor/Flood Park Triangle
on Jul 15, 2016 at 5:41 pm

HelloHanalei is a registered user.

Menlo Voter, I know from prior experience that you and I will never find common ground, but I don't believe that *any* amount Facebook could offer would be enough to offset the massive and long-lasting impacts of the development they're proposing. Nor do I believe that Facebook cares about the sense of community or quality of life in Menlo Park. Facebook is a hugely powerful corporation that wants what it wants and will pay what's necessary in order to achieve its goals. $15 million is pocket lint to Facebook, but it will buy them free reign to do as they wish in our community, while we residents struggle to live with the consequences. I just don't see how the kind of growth Facebook is proposing makes sense for a small city like Menlo Park.


9 people like this
Posted by Menlo Voter.
a resident of Menlo Park: other
on Jul 15, 2016 at 6:05 pm

Menlo Voter. is a registered user.

Hello:

as I've said before, the growth is coming whether we like it or not. We can either choose to engage and get things like Facebook is offering or stick our heads in the sand as we've been doing until this big problem becomes HUGE. What Facebook is offering is mitigation to the problems that already exist and some for what is coming. Growth is not going to stop. People will continue to move here and we need to figure out how to deal with the population growth. Pretending that growth can be stopped is not going to deal with what is coming. We either address it on our terms or have it shoved down our throats. I prefer to accept the inevitable and try to make it as palatable as possible,


5 people like this
Posted by chris
a resident of another community
on Jul 15, 2016 at 9:44 pm

There were large businesses on the land that FaceBook is redeveloping.
The extortionists of Menlo Park make it sound like this is a de novo development.

If Menlo Park does not negotiatie reasonably, the residents will end up with something much worse than what FaceBook is offering.

Look at Palo Alto. After the residents crossed the line into extreme demands instead of reasonable compromise, the result was junk. Edgewood, Alma Plaza, condos at Charleston and El Camino.


16 people like this
Posted by whatever
a resident of Menlo Park: Central Menlo Park
on Jul 15, 2016 at 9:58 pm

Seems the next generation of Robber Barons has arrived.


1 person likes this
Posted by local
a resident of Menlo Park: other
on Jul 16, 2016 at 6:32 am

That is nice of Facebook to offer such a generous offer - however !!!! Menlo Park council how about addressing the undeveloped & ugly lots// lots on El Camino Real where Rector cadillac used to be. Finish one project before starting a new one !! This has looked pretty bad for many years with no end in sight. Maybe the owners are just not paying enough to get their project pushed thru


1 person likes this
Posted by Menlo Voter.
a resident of Menlo Park: other
on Jul 16, 2016 at 6:55 pm

Menlo Voter. is a registered user.

local:

Those lots have already been addressed. It's all in the DSP. Perhaps you haven't heard of it.


7 people like this
Posted by Susan Smith
a resident of Woodside: Skywood/Skylonda
on Jul 17, 2016 at 1:36 am

Welcome to your new demographic of voters, Menlo Park. Be careful, and look carefully at Mountain View, where local voting Google employees are close to out-numbering the old timers. Think about the effects on planning, zoning, and traffic, as you sit in it.


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

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