Menlo Park mayor, Facebook officials smiling over terms of draft agreement

By Barbara Wood

Special to the Almanac

This is an expanded version of an article posted earlier this morning.

Both Facebook and Menlo Park officials say they are happy with the terms of an agreement the two have come up with that will allow Facebook to have as many as 6,600 employees on its current campus.

The agreement is scheduled for a vote by the Menlo Park City Council when it meets next Tuesday at 7 p.m. in the Menlo Park City Council Chambers, 701 Laurel St.

After 10 weeks of negotiations between Facebook and city officials, a draft of the terms for the development agreement between the social networking giant and the city was released on April 12.

Mayor Kirsten Keith said she is “very happy” with the proposed terms. “I’m very please and I think everybody worked very well on creating this and I hope to see it approved on Tuesday,” she said.

Mayor Keith said most of items that were important to the city ended up in the agreement including items that benefit East Palo Alto.

Facebook is “a fabulous addition to Menlo Park and we are very fortunate to have them here,” she said.

Facebook spokesman Tucker Bounds said Facebook plans “to be a very good neighbor and these generous proposals strongly underscore that commitment.” The terms, he said, include “a comprehensive range of commitments to Menlo Park that build upon the inherent benefits we believe flow from Facebook’s entry into the community. ”

In addition to the changes Facebook wants to make at its current site near the intersection of Willow Road and Bayfront Expressway, it is also seeking permission to eventually expand even further by building new offices and a parking garage on the nearby Constitution Drive site that could house another 2,800 employees. That development will be the subject of future negotiations and is not part of this development agreement.

The staff report on the draft agreement can be viewed here.

The agreement and letter from Facebook are here.

After Tuesday’s meeting, the Menlo Park Planning Commission is scheduled to hold a public hearing on the Facebook project, including the environmental report and the development agreement on May 7; the council will hold another hearing on May 29, with June 5 expected to be the date for final action by the council.

Among the development agreement terms are:

■ Facebook will make annual payments to Menlo Park, to make up for the sales taxes that a different type of business might pay, once the agreement to allow more than the current limit of 3,600 employees on campus is in place. The payments would be $800,000 per year for years one to five; $900,000 per year for years six to 10; $1,000,000 per year for years 11 to15; and then adjusted annually above $1 million. based on changes in the Consumer Price Index (CPI) for the remaining years.

The first 10 years of payments are guaranteed, but after that Facebook can revert to the previous cap of 3,600 employees or lower the number of vehicle trips allowed in and out of the campus and reduce the payment.

■ Facebook will make a one-time-payment to the city of $1.1 million that the city can use for any capital improvement projects.

■ Facebook will make an additional payment to the city if the city secures other funding for measures that are required by the Environmental Impact Report, such as roadway improvements

■ Facebook will create a local community fund with an initial $500,000 contribution. The fund will be created in partnership with an existing nonprofit organization and will have at least three board members appointed by Facebook, one appointed by Menlo Park and one appointed by East Palo Alto.

■ Facebook will create a high school internship program for students who live in the Ravenswood School District boundaries with at least 10 internships each summer.

■ Facebook will sponsor job-training programs and events. It will work with a local training program such as Jobtrain to expand training for local residents, create an ongoing quarterly series of career development workshops, and host a session on how to become a Facebook employee as well as requiring future vendors to notify local residents when they are hiring.

■ Facebook will provide housing assistance through potential investments in low-income housing tax credits and will support a housing project in Menlo Park, by either investing in the project, committing to leasing units or allowing the developer to market the project to Facebook employees.

■ Facebook will cooperate to underground electrical transmission lines.

■ Facebook will work to help close the Bay Trail Gap and may help pay some of the costs of the project.

■ Facebook will participate in the Caltrans Adopt-a-Highway program for five years.

■ Facebook will continue the Facebucks program with local businesses for at least three years. It will try to use local vendors for on-campus goods and services and will use the Menlo Gateway hotel if that project is developed.

■ Facebook will promote local volunteer opportunities for Facebook employees.

■ Facebook will improve the Bayfront Expressway undercrossing.

■ Facebook will explore the creation of a Willow Road business improvement district and contribute seed funding of up to $50,000.

■ Facebook will make ecologically sensitive improvements to the existing public trails around the perimeter of the east campus, working to make the area more pedestrian friendly.

■ When performing work that might affect the baylands, Facebook will hire an environmental consultant.

■ Facebook will cooperate with the Don Edwards San Francisco Bay National Wildlife Refuge and adopt various policies to protect the local wildlife and ecosystem.

■ Facebook will maintain and improve nearby levees.

■ Facebook will adhere to a vehicle trip cap of 15,000 per day, with no more than 2,600 each in the morning and evening commute hours, from 7 to 9 a.m. and from 4 to 6 p.m.

■ Facebook will try to get a Leadership in Energy and Environmental Design (LEED) gold award for the energy efficiency of every building on the campus.

■ Facebook will pay for bicycle and pedestrian improvements in Menlo Park and East Palo Alto.

■ Facebook will pay up to $1 million for pedestrian crossing improvements at Willow Road and US-101.

■ The agreement is contingent on Facebook’s coming to an agreement with East Palo Alto.

Although not part of the term sheet for the development agreement, the staff report for Tuesday’s meeting says that Facebook has agreed to stiff financial penalties for violating the trip cap. The penalty would be $50 per trip per day, with the penalty doubling if the cap is exceeded in two consecutive months or for four months within any six-month period. The penalty would double again if the cap was exceeded for six consecutive months.

The staff report also says that because the Facebook offices are so close to East Palo Alto part of any penalties paid will probably be shared with East Palo Alto, but that the percentage has not yet been agreed upon.

Facebook announced it would be moving to Menlo Park, taking over the former Sun Microsystems site at Willow Road and Bayfront Expressway, in February 2011, moving the last of its nearly 2,000 local employees onto the campus by late December of last year.

This February the company announced plans to sell its stock to the public, with the terms of the initial public offering putting the value of the company at $5 billion.

Under state law development agreements enable a city to grant a longer-term approval in exchange for demonstrable public benefits. The terms of the development agreement must be acceptable to both parties and the terms cannot be imposed.

Facebook has entered into a separate agreement with the Menlo Park Fire Protection District, addressing some of the district’s concerns. While district officials were not immediately available for comment, the staff report for Tuesday’s council meeting says Facebook has agreed to install special traffic signals near the site that emergency vehicles can use to override signal timing.