Menlo Park: Stanford's 'Middle Plaza' clears penultimate hurdle | News | Almanac Online |

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Menlo Park: Stanford's 'Middle Plaza' clears penultimate hurdle

Major question remains: Will schools be fully compensated for added costs?

Stanford's proposed 429,739 square-foot development on an 8.4-acre site along El Camino Real in Menlo Park, stretching from the Stanford Park Hotel to Big 5 Sporting Goods, passed a penultimate hurdle when the Menlo Park Planning Commission voted Aug. 28 to recommend approval of a package of agreements and permits needed to move forward.

The project is expected to be brought to the City Council in late September.

The approvals were split into five parts, and the commissioners voted 6-0 in favor of the first four: approving the findings of the final environmental impact report and accepting the proposed mitigations; approving the architecture plans, allowing 18 heritage trees to be removed and one to be transplanted, and accepting a "below market rate" agreement in which Stanford commits to renting 10 one-bedroom apartments to low-income tenants.

The commission also recommended the City Council give teachers in the Menlo Park City School District or child care providers preference in renting the 10 units.

(Commissioner John Onken was recused because his spouse works for Stanford.)

The commission then voted 5-1, with Commissioner Andrew Barnes opposed, to recommend that the terms of a proposed development agreement for the project be approved by the City Council.

In the development agreement, Stanford has committed to pay half the cost, up to $5 million, of a new bike and pedestrian bridge over or tunnel under the Caltrain tracks at Middle Avenue.

The development agreement also stipulates to pay $1 million over 10 years to the Menlo Park-Atherton Education Foundation, which raises funds for Encinal, Oak Knoll and Laurel elementary schools and Hillview Middle School.

A City Council subcommittee has recommended that Stanford increase its contribution to the foundation to $1.5 million over 15 years. Mr. Barnes said he didn't support it because he said he wasn't given enough data to make an informed decision.

The project

Stanford has proposed to build 215 one- and two-bedroom apartments (276,613 square feet), 10,286 square feet of retail and restaurant space, and 142,840 square feet of office space. A large public plaza near Middle Avenue is also proposed. The project will have about 930 parking spots, most of which will be in underground parking garages, with some surface parking.

The two residential and three office buildings proposed are expected to bring 512 residents and 500 employees to the site. These new people and visitors are expected to add about 2,658 daily vehicle trips.

Impact on schools

Since Stanford plans to use the apartments for staff and faculty housing, the university will not be required to pay property taxes on those units.

Erik Burmeister, superintendent of the Menlo Park City School District, said in a public comment that he and the district are concerned that the district will incur major costs to educate the children who might live in those apartments, since the district is funded with property taxes and does not receive a designated per-student funding allocation from the state.

Estimates varied on how many students the new development might bring to the district. Mr. Burmeister cited an estimated 39 new students from the development, which, according to him, could cost the district as much as $660,000 a year, given expected 2019 costs of $17,000 per student.

Jean McCown, told the commissioners that ultimately, Stanford is designated as a tax-exempt academic institution by the state of California, and the university does not plan to distribute funds "as though we are not tax exempt," she said. "That's not a place we can go. We are making a major investment in this property and community in a new way that hasn't been the case for a while."

Each year, she said, the apartments will be assessed to see if property taxes are required. If the university ends up leasing apartments to non-Stanford affiliated tenants, then property taxes will be paid for those apartments. In addition, Stanford plans to lease the three proposed commercial and office buildings to outside tenants and will be required to pay property taxes on those.

City Attorney Bill McClure said Stanford already leases about 180 apartments in the city of Menlo Park to house its students, faculty and staff, and gets a property tax exemption on those. Some of those residents might move into the Middle Plaza apartments and not add to lost property tax revenues for local schools.

The terms of the development agreement, including the amount of funding Stanford has committed to local schools, will be discussed at the Menlo Park City Council's meeting tonight.

The council meets at 7 p.m. in the Menlo Park City Council Chambers at 701 Laurel St. in the Menlo Park Civic Center.

Access the meeting agenda here or watch the meeting online here.

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Comments

13 people like this
Posted by Dana Hendrickson
a resident of Menlo Park: Central Menlo Park
on Aug 29, 2017 at 12:22 pm

Now it's up to our City Council to courageously stand up for resident interests and insist that Menlo Park gets a better deal. See analysis in comment section of Web Link.


17 people like this
Posted by Jack Hickey
a resident of Woodside: Emerald Hills
on Aug 29, 2017 at 12:43 pm

Jack Hickey is a registered user.

"Since Stanford plans to use the apartments for staff and faculty housing, the university will not be required to pay property taxes on those units."

Why don't we fix this aberration in the property tax code? And, while we're at it, do the same for the SMCCCD housing at Canada College? These properties should be paying the same taxes as their neighbors.

"The development agreement also stipulates to pay $1 million over 10 years to the Menlo Park-Atherton Education Foundation, which raises funds for Encinal, Oak Knoll and Laurel elementary schools and Hillview Middle School."

This is a convoluted scheme to hide the true cost of the government education system.


9 people like this
Posted by Jack Hickey
a resident of Woodside: Emerald Hills
on Aug 29, 2017 at 12:51 pm

Jack Hickey is a registered user.

"City Attorney Bill McClure said Stanford already leases about 180 apartments in the city of Menlo Park to house its students, faculty and staff, and gets a property tax exemption on those. Some of those residents might move into the Middle Plaza apartments and not add to lost property tax revenues for local schools."

Hello! What kind of nonsense is this? Go back and do your homework, Bill.


10 people like this
Posted by whatever
a resident of Menlo Park: Central Menlo Park
on Aug 29, 2017 at 1:18 pm

So I can create a nonprofit buy a house in Menlo Park to house my nonprofit employee, Me, and be exempt from property taxes. Sounds like a plan.

Back to the exempt Stanford housing portion, does that mean they pay no taxes for the police dept, fire dept, city operations, etc? That to put it mildly s**ks.


16 people like this
Posted by whatever
a resident of Menlo Park: Central Menlo Park
on Aug 29, 2017 at 1:28 pm

Stanford is a business which takes in hundreds of millions in donations and rents each year. Donations which reduce donor taxes and then SU is exempt? I would hope that they are paying prop taxes on the land buildings of the industrial park and the shopping center. What did they use to call the Big Four - The Robber Barons?


8 people like this
Posted by congrats to Andrew Barnes
a resident of Menlo Park: Central Menlo Park
on Aug 29, 2017 at 1:50 pm

Congratulations to Commissioner Barnes for stating the obvious: there simply isn't enough information to make a good decision. I hope the City Council will demand more. It wouldn't take long, and would help justify whatever decision they ultimately make.


2 people like this
Posted by come on man
a resident of another community
on Aug 29, 2017 at 3:00 pm

The worst kept secret in town is that Barnes wants to run for City Council. Barnes hedged his bet by voting for the project and voting against the development agreement.


17 people like this
Posted by Where is the proof?
a resident of Menlo Park: Allied Arts/Stanford Park
on Aug 29, 2017 at 3:16 pm

If this is so good for menlo park, where is the proof? I could not any financial analysis in the staff reports. Who would run a business without a handle on the financial
Impact of decisions. Why should the city make decisions on the blind? Prove that this is a good financial deal.


11 people like this
Posted by Tree Lover
a resident of Menlo Park: Linfield Oaks
on Aug 29, 2017 at 4:45 pm

It seems like no one is concerned about one other issue with this, and several other projects that are being considered. They are tearing down HERITAGE trees!! This project alone it getting rid of 18 of them. The one at the old Beltramo's site is tearing down 7 more. What's the point of designating a tree as heritage, if they are just going to be allowed to tear them down anyway. Just another way for the city to get money... charging a fee for a permit to allow them to tear the trees down.

SAVE THE TREES!!!!


22 people like this
Posted by Menlo Voter.
a resident of Menlo Park: other
on Aug 29, 2017 at 7:12 pm

Menlo Voter. is a registered user.

This deal sucks. I supported development of this property when the idea was it would NOT house Stanford employees as that would not generate property tax revenues that will be very necessary to take care of the residents of the residential portion of this project. Stanford either needs to NOT use it as housing for Stanford employees OR pay whatever the property taxes would actually be if it wasn't tax exempt. If Stanford won't step up and do that, then forget it.

As much as I hate the blight of the vacant lots I am unwilling to carry the tax burden for Stanford. The Stanford that is worth billions of dollars. I'll take teh blight before I carry a billionaires water.

Menlo City Council are you listening? This is a crappy deal. Demand Stanford pay their fair share. This deal doesn't make that happen


7 people like this
Posted by Aaron
a resident of Menlo Park: Downtown
on Aug 29, 2017 at 9:44 pm

"Stanford has proposed to build 215 one- and two-bedroom apartments"

Can we please have some real mixed housing units built in central Menlo Park? I understand that we don't want over-subscribed schools, but as far as I can tell, there are very few developments where 3-bedroom apartments are being built. Let's not kid ourselves and think that we're building a true community by building more one bedroom apartments for single tech workers and two bedroom flats for young couples with no children and Stanford post-docs. Yes, we need those spaces, but we need more than that. People still want to live here, they still want to have children, and there's a real need for housing somewhere between the $4M mansions, the $2M tear downs, and a 2-bedroom apartment rental for a family of four in our city.

For those of you who will respond that families of four will move into a 2-bedroom, you're right...they (we) will. But should that be our community? Is that what we're building here?


15 people like this
Posted by Aaron
a resident of Menlo Park: Downtown
on Aug 29, 2017 at 9:50 pm

One more thing...

Yeah, not good that Stanford won't pay property taxes here. Put in three bedroom apartments, but do not rent them out to Stanford staff in a tax-exempt manner.If Stanford is developing this property but they are not paying property taxes, they're not fully investing in our community.


9 people like this
Posted by Easy
a resident of Menlo Park: Allied Arts/Stanford Park
on Aug 30, 2017 at 12:32 am

The MPCSD should rezone to exclude that property from the district. Problem solved.


5 people like this
Posted by Peter Carpenter
a resident of Atherton: Lindenwood
on Aug 30, 2017 at 4:13 am

Peter Carpenter is a registered user.

"The MPCSD should rezone to exclude that property from the district."

Such a detachment would require LAFCO approval and such approval would not be granted unless a suitable successor agency were willing to take on the current MPCSD responsibilities.


5 people like this
Posted by MP Resident
a resident of Menlo Park: Downtown
on Aug 30, 2017 at 7:57 am

The comments here feel like the endgame of the "I got mine, screw you" generation.

Let's look out for the interest of all residents, both those that buy and those that rent.

Let's assume that kids deserve a good education, even if they're in an apartment. The idea of blocking students from MPCSD is an incredibly selfish and short-sighted one.

We should be building 3br rentals, and they should be a significant part of new development. A market rate 3br rental generates plenty of property taxes, at least as long as there isn't some Prop 13 loophole mixed in there.

The real problem is the combination of "I got mine, screw you" attitudes and prop 13. If we could phase prop 13 out, issues like school funding for new development (including rentals) would be much easier to solve.


6 people like this
Posted by AJ
a resident of Menlo Park: Central Menlo Park
on Aug 30, 2017 at 8:26 am

Great! More traffic.


5 people like this
Posted by Cayo
a resident of Menlo Park: other
on Aug 30, 2017 at 12:37 pm

I'm very discouraged that the heritage trees are being cut down, and that only 10 one bedroom apartments will be for low income tenants. That sounds like a ploy to only house singles or couples and no children since those units are one bedroom. I was hoping to see more units for our hard working service industry families. They are the backbone of our city and would be well served if they could walk to work in Menlo Park's downtown restaurants and other service jobs. Our projects seem to have forgotten them.


7 people like this
Posted by Once again, the rich avoid taxes
a resident of Menlo Park: Downtown
on Aug 30, 2017 at 12:49 pm

In the last few years, the MPCSD board has voted to include/exclude a few properties from the district, notably 600 Willow, which was part of Ravenswood for decades despite being surrounded by the MPCSD. And those residents pay property taxes. Never heard of LAFCO and I doubt they have any authority here.

According to what I've read, people who live in faculty housing on campus pay property taxes. However, the Escondido Village units do not, so the children of grad schools get to attend school for free.

Has this 1992 case regarding university exemptions on property tax been superseded? Web Link I can find nothing newer.

"The Palo Alto Unified School District urged the court to deny the exemption, saying much of its money comes from taxes on the Stanford leases."


2 people like this
Posted by Peter Carpenter
a resident of Atherton: Lindenwood
on Aug 30, 2017 at 1:31 pm

Peter Carpenter is a registered user.

I stand corrected - school district boundaries are not controlled by LAFCO..

"The county committee on school district organization has a major role in the review and approval of proposals to change school district organization in the county. This chapter discusses how the members are selected, how committees should function, and how they are financed. "


This rule would preclude exclusion of the 500 ECR project from MPCSD:

"iv. Leapfrogging Prohibition. On or after January 1, 1981, no school district may be newly formed or reorganized so that any portion of it is completely separated by territory of another school district. (EC 35543) "


8 people like this
Posted by Tim
a resident of Menlo Park: The Willows
on Aug 30, 2017 at 2:55 pm

@Once Again

I believe the court case you cite is Connolly v. Orange County. If that ruling still holds, Stanford would have to pay property taxes on even the apartments it rents out as long as no "educational purposes" occurs there. And I can't imagine any educational purposes would be allowed at Middle Plaza unless it was zoned for that purpose.

I suspect that ruling doesn't hold. Everyone seems to be working under the assumption that Stanford won't pay any property taxes on its housing. But I would love to be proven wrong.

I don't have much faith in the Menlo Park city attorney, however. He says that when a private property owner leases to someone affiliated with Stanford, that owner gets a property tax exemption. So, if I take one credit at Stanford's Continuing Education program, I can exempt myself from property taxes. And it doesn't have to be Stanford. It's any educational institution.


1 person likes this
Posted by Jon C
a resident of Menlo Park: Central Menlo Park
on Sep 7, 2017 at 12:11 am

142K of Office = ~ 1,000 Employees. Current Density is 135/SF per Employee and even more dense for the high cost real estate markets.

Predicting 500 Employees is nonsense along with 930 parking spaces for the project.

This project will severely cripple the Allied Arts Neighborhood and the Middle Avenue Traffic will become even more dangerous.

Current projections should take into account the 1,000 Employees and their "day-trips" and traffic solutions proposed accordingly.

The high rents for the project will easily support building it and Menlo Park should see their share of the profits. Stanford will pass on the RE Taxes to the New Tenants and the residents will be left with more Traffic. Stanford isn't paying those Taxes.....

maybe MP comes up with a formula that punishes more trips than what is being "assumed." That way MP residents can come up with a monetary # that will satisfy them if Stanford is wrong about the traffic impacts.

Stanford is a great neighbor but they have a corporate Real Estate team and are very sophisticated. They are reaping huge benefits and most likely the builder will donate the construction costs so this all could be free anyway.

Candidly, I think we should put in a couple of nice sports fields a big park and call it a day.


4 people like this
Posted by MPer
a resident of Menlo Park: Central Menlo Park
on Sep 7, 2017 at 2:43 pm

Too bad the citizens of mp fought having condos built there in 2002, not university housing. and for those complaining about stanford's non-profit status, please remember that anyone who has been here more than 15 - 20 years is not paying anywhere near their share of property taxes either.


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