Facebook is now the largest landowner on the city's Bay side — the company now owns about 34.5 percent of the land there, and about 6 percent of the city's total land area, according to the commission's letter — and has also been a key funder of various city and regional initiatives, including an analysis now underway to explore rebuilding the Dumbarton rail line.
According to the commission's advice letter, Combs should not be permitted to participate in any decisions in which Facebook is the direct applicant, and he will have to disclose his conflict of interest as a company employee.
However, when it comes to other projects that may affect Facebook properties or interests, such as the "ConnectMenlo" zoning on the city's Bay side (where Facebook is planning its massive "Willow Village" development) and the city's Transportation Master Plan (which will impact how traffic is managed across the city and how much developers like Facebook will have to pay in transportation impact fees), Combs may be able to weigh in because Facebook would not be a primary party in such decisions, and because such decisions are unlikely to affect the value of Facebook shares.
The letter states: "Councilmember Combs may be prohibited from taking part in (a decision) if (it) is limited or directed toward Facebook or its property. However, if another entity, such as the City, initiated amendments to the General Plan or the Transportation Master Plan, and the decisions were not limited or directed towards Facebook or its property, Facebook would not be explicitly involved; and the financial effect of the decision on Councilmember Combs' interest would be reasonably foreseeable and material only if a prudent person with sufficient information finds it reasonably foreseeable that the effect of the decision would contribute to a change in Facebook's stock price."
The letter also indicates that Combs would not be allowed to participate in decisions about properties near Facebook if those decisions might affect Facebook's stock prices. But the likelihood of such land use decisions having an impact on the value of shares at the sixth-fastest growing company in the world (that was in 2018, according to Fortune) is questionable.
City Attorney Bill McClure wrote in an email that Combs would have to recuse himself from participating as a council member in a matter involving a city project only if it would affect the value of Facebook's shares, which are determined based on gross revenues and profits, rather than the value of its assets or an increase or decrease in that value.
"So with a market cap of something like $400-500 billion, even if (Facebook) loses development potential on its properties, it would not affect the values of its shares," he writes. "My conclusion is that any decision (on ConnectMenlo) will not have an impact on (Facebook) shares."
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