Menlo Park: Council hashes out details of Sand Hill Road annexation

Members of the Menlo Park City Council were surprised they were expected to approve, upon their first scheduled discussion of the project, an application by Stanford to build a 40,000-square-foot, two-story office building at 2131 Sand Hill Road — across Sand Hill Road from the Sharon Heights Shopping Center on Sharon Park Drive.

As part of the proposal, the city would annex 16 acres owned by the university that are in unincorporated San Mateo County.

Instead of approving or denying the project, the council members decided to treat the hours-long discussion as a study session.

They directed an existing subcommittee of councilmen Ray Mueller and Peter Ohtaki, who negotiated with Stanford on its other proposed development across town (at 500 El Camino Real), to negotiate further with the university. Stanford officials appeared willing to discuss a transportation management association.

The 16-acre parcel includes the residence of the Stanford provost (formerly the Buck Estate) and the Hewlett Foundation’s offices.

The county required that the property be annexed into a city for new commercial development, according to Jean McCown, associate vice president of government and community relations at Stanford.

The annexation process requires negotiation between the county and city to come up with how to fairly transfer the costs of providing city services and the benefits of new property tax revenues, a process overseen by the Local Agency Formation Commission, or LAFCo.

If the city annexes the property, it will receive 10.5 percent of the property taxes generated on the site each year, which would likely yield about $6,500 a year without additional improvements, and potentially more. For every $1 million increase in assessed value, the city can expect to receive an additional $1,050 a year, staff say.

According to an environmental analysis of Stanford’s Sand Hill Road project, the new office is expected to generate an estimated 302 daily vehicle trips, with 47 trips added during the peak morning hour and 36 added during the peak evening hour.

Sound wall

A request by the Sharon Oaks Homeowners’ Association did not appear to be up for consideration by Stanford.

Residents there say there is a high level of noise – about the level of a TV or a vacuum running – generated by all the traffic on Sand Hill Road. Noise studies from 2004, 2006 and 2016 back that up, said City Attorney Bill McClure, though the levels haven’t shown an increase in that time.

A lot of the traffic noise, argued Jason Browne, president of the homeowners’ association, is due to the cumulative effect of Stanford’s continual expansion. He, and a number of other residents in the neighborhood, in person and email, asked that the university contribute half the cost to rebuild the 50-year-old sound wall that residents consider inadequate.

Steve Elliott, managing director for development at Stanford, told the council the university had been working on other mitigation steps with stakeholders that were tied to the specific project being proposed, and in a letter sent Aug. 22, told the council, “Stanford respectfully declines to contribute University funds to the effort to replace or expand the homeowners’ association’s sound wall.”

In his oral comments to the council, his words were not so diplomatic: “This is more of an opportunistic, in my opinion, recognition that Stanford has deep pockets and probably wouldn’t care … It’s purely a money grab and we’re not going to do it.”

Sand Hill Road losing VC appeal?

Mr. Elliott told the council the proposal’s key addition in value to the city would be the creation of a new office building on Sand Hill Road. Though the road is known widely as the prestigious home of top venture capital firms, and accordingly, claims some of the highest commercial rental prices in the country, many of the office structures are decades old and wearing out, he said, leading some venture capital firms to choose locations elsewhere.

Housing?

Mayor Kirsten Keith expressed disappointment that housing was not proposed on the site. The current zoning is residential, and the site was considered for potential housing when the city updated its housing element. However, the property was considered county land and the city couldn’t do anything about it.

John Donohoe, associate director of planning and entitlements at Stanford, said that because of the shape of the property – it is triangular, with required 75-foot setbacks to the front and rear – not much housing would fit on it, even if the university wanted to build it there.

The matter is expected to be brought before the council again in September.

El Camino project

By the time the council finished its discussion of Stanford’s Sand Hill Road project, the clock was ticking precipitously close to the next day, so the council agreed to hear public comments from patient audience members and postpone its discussion on the terms of a proposed development agreement with Stanford for its 500 El Camino Real or “Middle Plaza” project until September.

The terms of the proposed development agreement stipulate that Stanford would fund half the cost of a bicycle and pedestrian tunnel beneath or crossing over the Caltrain tracks at Middle Avenue, up to $5 million; that it would provide 10 one-bedroom apartments to low-income renters, with potentially five designated for qualifying teachers in the Menlo Park City School District; and contribute to the Menlo Park-Atherton Education Foundation.

The council subcommittee negotiating with Stanford on the matter had pushed the university to give $1.5 million over 15 years to the foundation, while the university has only agreed to a contribution of $1 million over 10 years.

Public commenters urged the university to increase its sustainability commitment to match the city’s sustainability requirements in newly rezoned areas of eastern Menlo Park and to provide more funding to the school district.

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