Menlo Park: City releases proposed development terms for Greenheart project

City Council may approve terms at Tuesday meeting

The 420,000-square-foot mixed-used development that Greenheart Land Co. has proposed in downtown Menlo Park near the Caltrain station would be one step closer to approval if the Menlo Park City Council approves the terms of a development agreement at its Tuesday, Sept. 13, meeting.

City staff is recommending that the council adopt the development terms negotiated by council members Peter Ohtaki and Catherine Carlton with Greenheart, and released by the city on Thursday night.

Under terms of the agreement, the developer would be required to provide 14 below-market-rate housing units, pay $2.1 million in cash to a public amenity fund, guarantee $83,700 in sales tax payment per year, and build a dog park.

The proposed development at El Camino Real and Oak Grove Avenue is at the "public benefit bonus" level, which allows additional development in exchange for public benefits.

Greenheart proposes to build two office buildings of up to 199,300 square feet of floor space; one residential building for 183 dwelling units; up to 29,000 square feet for "community-serving" uses, such as retail and personal service; and an underground parking garage and small surface lot for 1,000 parking spaces.

Mr. Ohtaki and Ms. Carlton were appointed by the council to negotiate with Greenheart.

The term sheet says, according to a staff report, that if the terms are approved, Greenheart Land Co. will:

● Give the city a $2.1 million cash contribution, which would be earmarked to be spent on a public amenity in the El Camino Real/downtown specific plan area, which includes El Camino from Watkins Avenue to the San Francisquito Creek and the city's downtown area and Civic Center.

● Designate 14 of the apartments for low-income tenants (three two-bedroom units, three large one-bedroom units, and eight small one-bedroom units). In addition, six small one-bedroom apartments would be designated for tenants whose income falls between the median and "moderate" income levels. Under the city's below-market-rate ordinance, the developer would be required to fund only 10 units for low-income tenants. In San Mateo County, the income threshold for low-income is no more than $98,500 for a family of four. A family of four qualifies for median or moderate-income housing if the income is between $107,700 and $129,250.

● Build a fenced dog park where Greenheart had previously planned to put a bocce court.

● Guarantee that the retail space in the development would generate at least $83,700 in sales tax revenue per year for the city, or about $4.50 per square foot, beginning two years after the project is built.

● Market the office space for startup-friendly uses, such as incubators, accelerators and co-working locations, unless the space is rented to just one tenant.

In exchange, the city will:

● Not make Greenheart pay new impact fees or in-kind requirements, such as the housing impact fees the city is considering, for three years, with the chance of two annual extensions. The city can still increase the impact fees already in place, however.

● Allow the conditions in the first building permit to apply to other permits planned for different phases of the project's construction.

The terms of the agreement would last for 10 years, while the below-market-rate apartments would be held to a 55-year agreement with the city.

The Menlo Park City Council will meet Tuesday, Sept. 13, starting at 7 p.m. at the council chambers at 701 Laurel St. in the Civic Center. Read the agenda or watch the meeting online.

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25 people like this
Posted by Elsie
a resident of Menlo Park: Downtown
on Sep 9, 2016 at 12:21 pm

I'm usually a go-along to get-along person, but this really breaks my heart. I love the low-key look of this little town and this addition somehow portrays a completely different feel. It may be good for city coffers, but personally, I think this gargantuan structure should be somewhere else.
Elsie Floriani

Like this comment
Posted by George C Fisher
a resident of Menlo Park: Central Menlo Park
on Sep 9, 2016 at 12:47 pm

Menlo Park would allow Greenheart the following development per the Staff Report:

"Greenheart Land Company (“Greenheart”) is proposing to redevelop a multi-acre site on El Camino Real and Oak Grove Avenue with up to 217,000 square feet of non-residential uses and approximately 183 dwelling units. The project would demolish the existing structures in the southern portion of the site and construct approximately 420,000 square feet of mixed uses. In total, the project would include three mixed- use buildings, an underground parking garage, a surface parking lot, onsite linkages, and landscaping. The uses at the project site would include approximately 188,900 to 199,300 square feet of non-medical office space in two buildings, approximately 202,100 square feet of residential space in one building, and between 18,600 and 29,000 square feet of community-serving space throughout the proposed office and residential buildings. The project would provide approximately 1,000 parking spaces within the underground parking garage and small surface parking lot."

14 people like this
Posted by Reality Check
a resident of Menlo Park: Downtown
on Sep 9, 2016 at 3:26 pm


I hear you and sympathize that this city is changing rapidly. But the city council has opened the door to Facebook and other large commercial developments adding a massive number of new jobs to the city. Those workers need a place to live. If the City Council wanted to keep Menlo Park a village they shouldn't be welcoming 15k Facebook employees by approving the company's request for an expanded campus. Its a real shame that this growth was so explosive overnight and not smartly planned over time. But what can you expect from part time politicians who prioritize their careers and home values over the needs of the broader community. Selfishness got us here.

Sincerely Yours,
Reality Check

7 people like this
Posted by whatever
a resident of Menlo Park: Central Menlo Park
on Sep 9, 2016 at 3:30 pm

Not to sound too crude but traffic along ECR and Oak Grove already suck. But hey Mr. Ohtaki and Ms. Carlton got us a dog park - whooppee! Great negotiators.

10 people like this
Posted by Reality
a resident of Atherton: other
on Sep 9, 2016 at 4:15 pm

Reality Check: I do not understand your logic, because Menlo council made 1 mistake they should continue on with this lunacy? How about calling a temporary stop of big growth for 3 years and everyone take a breather from massive expansion projects?

18 people like this
Posted by Debbie Hall
a resident of Menlo Park: Central Menlo Park
on Sep 9, 2016 at 4:20 pm

While I share concerns about the traffic impacts, our city needs more housing and it makes sense for higher density housing like this to be near the train station. The changes coming to Menlo Park, along El Camino, have not happened "overnight"; we have had vacant lots where there once were car dealers for many years now. The City of Menlo Park has taken a lot of time - several years -- to create its plans to develop the downtown and El Camino corridor, and they held many open meetings over these years inviting public comment. Stanford has plans for development at the other end of El Camino, and they have also invited public comment multiple times -- I attended two sessions where they presented multiple drawings and images of their plans and options. They solicited feedback on specific questions on how plaza space should be built out, what kinds of retail the public wants to see, etc. Acknowledging that there may be traffic impacts, I believe it's time to see these empty blocks on El Camino turned into something better.

20 people like this
Posted by Local
a resident of Menlo Park: Allied Arts/Stanford Park
on Sep 9, 2016 at 4:30 pm

Empty lots need to go. This fits with the very public plan that's been in the news for years.

I also am concerned with traffic, but not to stopping development of needed housing, which Is long overdue.

I do wish future sites would reserve some units for senior housing. No one is looking out for seniors, who have lived here for decades and are being forced out. Once you retire on a fixed income, you have no capacity to absorb rent increases, never mind rent doubling.

18 people like this
Posted by bad deal
a resident of Menlo Park: Allied Arts/Stanford Park
on Sep 9, 2016 at 4:39 pm

This is a bad deal. The project does not add enough housing for the workers in its maxed-out office buildings. It looks as if the developer is going to pack in tech workers.
The site could help ease the existing shortage by building the housing it could (more than 300) but instead there are only about 180 units at the same time a lot more workers would be coming to town. A lot more housing should be required, either on site or elsewhere as a public benefit.

This is a real test of how serious our council is about providing housing.

If the developer won't add housing to support the workers of the office buildings, they should at least be required to share their big wad of profit by contributing to the purchase of land where a lot more housing could be built. It should not be ok to worsen the shortage and still grant "public benefit" development rights.

The council should negotiate hard for a much better deal --- or tell the developer to build a smaller project with no net new demands for housing. Menlo Park has enough of a shortage. This worsens it, not helps it.

10 people like this
Posted by Samia
a resident of Menlo Park: Linfield Oaks
on Sep 10, 2016 at 10:13 am

Another hideous, oversized building. Please stop the overbuilding. Not to mention Greenheart plans to cut down every tree on the site and, by the looks of it, plant a few non-endemic palm trees that provide no shade. Palo Alto has finally started to wake up. What will it take for Menlo Park to do the same?

2 people like this
Posted by Dagwood
a resident of Menlo Park: Menlo Oaks
on Sep 10, 2016 at 10:45 am

An ambiguous piece of the Greenheart project is the nature of the retail to go on El Camino and Oak Grove. The City Council should look at ways to ensure the placement and types of retail are ones useful for residents and consumers, and likely to generate foot traffic and interest; it's not just counting dollars in sales tax revenue which will follow good retail planning. The roughly $2M public benefit payment is a good start - but it falls short of the 50% benefit goal discussed for the new General Plan benefits. Council also needs to push for a larger amount, especially with the upcoming planning of a Middle Avenue bike/ped underpass and a Downtown parking structure.

7 people like this
Posted by History Buff
a resident of another community
on Sep 10, 2016 at 5:26 pm

This is definitely a bad deal. Menlo Park sells itself short. Only $15M from Facebook, which is a drop in the bucket for them. Now only $2.1M and a dog park for this big project.

The EIR says it would increase traffic by as much as 25% at nearby intersections. As if traffic through Menlo Park isn't already a disaster.

6 people like this
Posted by Susan Smith
a resident of Atherton: West Atherton
on Sep 11, 2016 at 5:17 pm

This is the most mundane, ugly addition to Menlo Park, ever. It's so common. How about something a little nicer, a little different, a little more spectacular, a little more for lower income folks. Bought off by Facebook.

2 people like this
Posted by Stats
a resident of Menlo Park: South of Seminary/Vintage Oaks
on Sep 12, 2016 at 10:57 am

Lots of Monday morning quarterbacking in the comments here. Bottom line is that negotiating is challenging and complicated when there are many different citizen interests to support. If the negotiations were as easy as many imply, the former car lots wouldn't have been vacant for umpteen years.

And the whole "let's wait and see how things shake out" strategy doesn't make sense since there's all sorts of development going on just outside Menlo Park, in Redwood City, Palo Alto and Mountain View. Traffic is going to continue to get worse on Willow, even without Facebook, because it is a key link between the Peninsula and the East Bay. Sand Hill road is going to continue to get uglier because it links Palo Alto to 280. And El Camino is a critical artery between towns up and down the Peninsula, not just Menlo's exclusive connector. The best we can do is plan for intelligent growth. Trying to keep things the same only compounds problems.

6 people like this
Posted by Menlo Voter.
a resident of Menlo Park: other
on Sep 12, 2016 at 5:17 pm

Menlo Voter. is a registered user.

If MP would stop choking a six lane high to four lanes through town much of our ECR traffic woes would be greatly reduced. One only need look at either end of town where traffic flows quite well with six lanes. Open two more lanes on ECR.

1 person likes this
Posted by Need housing
a resident of Menlo Park: Central Menlo Park
on Sep 12, 2016 at 10:27 pm

This project does not add nearly enough housing for the new workers in its offices. The council will show their true colors about the housing shortage if they approve this term sheet. They probably dont have the guts to send it back for more housing but theu could demand enough money to build more offsite. . The decloper is making a huge wad on this. They can cough up more. They wont go away. Their profit margin is so big, they can pay a lot more to help solve the problems they create

2 people like this
Posted by Menlo Voter.
a resident of Menlo Park: other
on Sep 13, 2016 at 6:33 am

Menlo Voter. is a registered user.

"The decloper is making a huge wad on this. They can cough up more. They wont go away. Their profit margin is so big, they can pay a lot more to help solve the problems they create"

And you know this because?

2 people like this
Posted by Need housing
a resident of Menlo Park: Central Menlo Park
on Sep 13, 2016 at 10:13 am

@ Menlo Voter. "And you know this because."
I read. [part removed.]

The planning commission staff report for march 21st had BAE Urban Economics study for the city. It shows profit of $78.2 million, a 30% rate of return. They say that includes cost of 5% developer fee that Greenheart wont take (~$5.9 million)
So the return is on order of 35% Or about $84 million when BAE says the market range is 8 to 12%. Market range is profit of $20.8 to $39.3 million so greenheart is getting $53 to $59 million MORE than market range.

I call that a wad.

so the negotiated $2 million looks downright pitiful considering the magnitude of extra profit the city would allow at the bonus level. Just half of that excess would build a lot of needed housing

3 people like this
Posted by MPer
a resident of Menlo Park: Central Menlo Park
on Sep 13, 2016 at 10:36 am

The [Part removed. Please make your point without negative characterizations and labels] are at it again. First they wanted to build no housing, now the tactic is to say there is not enough housing. You folks are as transparent as Trump.
The project complies with the DSP passed by the voters. They are adding 183 units of much needed housing.
I don't see any of you offering to buy up land a build housing. so please just stop.
Oh, and the buildings look way nicer than most of the dilapidated buildings that line ECR. Yes, complaining the balding is ugly is just another "no bird" tactic that has no basis for fact.

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

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