An offer by local philanthropist and billionaire developer John Arrillaga to help the city of Menlo Park build a new main library has been rescinded, according to a statement from the city on Monday evening (Oct. 1).

Arrillaga made the offer in July 2017. He had agreed to fund the project's costs after the first $20 million. He later made clear that the offer would not extend to soft costs, which the city estimated to be an additional $10 million.

The developer was the chief donor for the projects to build the Arrillaga Family Recreation Center, the Arrillaga Family Gymnasium and the Arrillaga Family Gymnastics Center in Menlo Park's Civic Center.

His offer to provide the bulk of funding and to help build a new main library has carried some controversy, partly because of the strings attached to the offer. The offer applied only to the main library at the city's Burgess Park campus, and not to a library in the Belle Haven neighborhood.

City Manager Alex McIntyre said he had suggested that Arrillaga's donation be used to help cover costs of building a Belle Haven library, which was higher on the city's list of priorities.

Another condition of Arrillaga's offer: The city had to come up with the first $20 million, and fast.

The city statement said that Arrillaga's anticipated timeline was for construction of the new library to begin in 2020. (Arrillaga's specific timeline expectations had not been disclosed publicly by the city until this announcement.)

But the offer has been withdrawn because "efforts to build consensus in project scope and site have delayed that timeline," according to the statement.

"I think it was pretty clear that we as a city haven't been able to reach a consensus on the main library for all sorts of reasons," said Menlo Park Mayor Peter Ohtaki. "One of the biggest is the cost. ... I think we were hearing clearly from our residents that the city has more pressing priorities, such as the Belle Haven library."

During discussions with the City Council, McIntyre had hinted that the matter was urgent, and that it was by no means a done deal, but efforts to streamline the public outreach process came across as heavy-handed. A public survey to gauge interest in a bond measure to raise taxpayer funds for the project was criticized for appearing to ask leading questions. Survey results indicated that when Menlo Park voters were asked whether they would support a $50 million, 30-year bond measure "to replace the aging Menlo Park and Belle Haven library system with 21st century libraries," only 61 percent said they would definitely or probably support it. A bond measure would need the support of two-thirds of voters to pass.

Later, a series of three public meetings held in December, January and February to select the site for a new library were dismissed by some for not engaging in the broader, more basic question of whether a new library is needed at all, and if so, where the project should fall on the city's priority list.

McIntyre said in a written statement, "The loss of Mr. Arrillaga’s generous contribution to the new main library project delays this project until a new funding source can be identified."

According to Ohtaki, making improvements to the main library will likely still remain on the city's to-do list, but will probably be pushed back to a 10-year timeline. "I think this effectively moves the main library to the back burner," he said.

Initial cost estimates from consultants to build a 44,000-square-foot library from March 2017 came in at around $45 million.

After the city received Arrillaga's offer last year, the council authorized staff to expedite the process. In October 2017 the council approved the creation of a $1 million fund to begin the public outreach process for the proposed main library, which included hiring a new full-time assistant to work on the project.

Funds were also used to make improvements at the existing Belle Haven Library and start early assessments to evaluate what might be needed at a new library in that neighborhood.

As discussions on a new main library progressed, Arrillaga's offer, staff reported, extended to include the costs of underground parking and a new City Council Chambers or large public meeting area – bringing cost estimates for the project up to about $58 million.

As the city explored whether to rebuild the library at its current site or move it closer to Laurel Street, staff explored the options of other uses as part of a new library structure, acknowledging that nowadays, many libraries serve not just as receptacles for books and media, but as community meeting spaces. The city briefly considered building a new child care center to replace the existing Menlo Children's Center as part of the project, but the idea was opposed by a number of parents.

Staff also discussed the possibility of including affordable housing as part of the project – if not as part of a new library structure itself, then as a development consideration near Alma Street if the council agreed to tear down the old library and build a new one on Laurel Street. The concept of affordable housing on the Burgess campus has been supported by the Housing Leadership Council of San Mateo County.

In May, the discussion was put on pause. And in August, a discussion on the project was postponed after a Brown Act violation characterized as "inadvertent" occurred.

"I respect his decision," said Councilwoman Kirsten Keith, who, along with Councilman Rich Cline, was on the City Council subcommittee tasked with communicating with Arrillaga on the project. "(Arrillaga) made a generous offer ... . There aren't other cities that get opportunities like that."

A discussion of future improvements to the city's libraries is likely to be postponed until January, when the council develops its annual work plan.

Meanwhile, as staff reported with some urgency, construction costs continue to escalate.

Another concern, voiced previously by Menlo Park Library Foundation President Monica Corman, has been that it will be much harder for the foundation to raise funds for a library renovation or reconstruction project if Arrillaga's offer is withdrawn.

Still, Ohtaki said, "I think it is appropriate that we take our time and do this right."

Belle Haven Library

The city's efforts to move forward with plans to build a new Belle Haven Library are unaffected.

There is also a possibility that the $1 million the city has set aside to work on library improvements could be redirected to the Belle Haven Library, Ohtaki said. He and Keith said the council is scheduled to discuss a recently completed needs assessment and decide whether to move forward with a space needs assessment for that library at its next meeting on Tuesday, Oct. 9.