Menlo Park Eyes Changes in How Developers Provide Public Benefits

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By Neil Gonzales

An idea to revise a process in which a project provides public benefits has come up again in Menlo Park just as other Silicon Valley cities similarly have been looking at how developers can contribute enhancements to the community where they want to build.

Menlo Park Planning commissioners John Kadvany and John Onken have broached the idea for possible changes in the “public benefit bonus” procedure as the city starts its biennial review of the specific plan governing development downtown and along the El Camino Real corridor.

Currently under the specific plan, a developer enters a “structured negotiation approach” to determine the benefit “above and beyond the inherent positive attributes of a project” in exchange for being given additional development space. The plan describes this approach as “the most flexible and effective way to determine appropriate public benefits.”

However, this process can become lengthy and convoluted, involving planning, economic and other studies and reviews. “The downside is that it creates some uncertainty and often delays the approval process, which can increase cost and risk for developers,” the plan said.

Kadvany and Onken have called for this approach to be simplified. A proposal by Kadvany included in a city staff report for the Aug. 3 commission meeting suggests a more direct approach in which the value of a public benefit could be determined based on the market price of the additional square footage that a developer is requesting.

Kadvany has also said that consideration should be given to lowering the threshold at which a project’s size and scale would trigger the requirement for developers to provide public benefits.

Kadvany and city planners did not immediately respond to requests for further comment. In an email response to questions from The Registry, Onken did not elaborate on what changes could look like, saying the discussion on public benefits is still in the very preliminary stage.

“It’s early days for this review of public benefit,” Onken said. “On the Planning Commission, we’re trying to make it more transparent and streamlined and take a wider look at the proposed [public-benefit] projects. We don’t have much more to share, other than what the staff knows.”

Bob Burke, a principal with the Palo Alto-based developer Greenheart Land Co.—whose proposed mixed-use development at 1300 El Camino Real in Menlo Park is a public-benefit project, praised the commissioners’ call to simplify matters.

“We applaud the effort of Kadvany and Onken to make things more simple and straightforward,” Burke said. “Developers love that.”

However, Burke has his concerns, saying that the possible changes would not take into account any special attributes that a project may have or variables in costs. “It treats all developments the same,” he said.

Greenheart Land’s El Camino project, dubbed Station 1300, is seeking additional space to build 182 apartment units, 190,000 square feet of office space, 29,000 square feet for retail, underground parking, public plazas and other features all near the Caltrain depot. The project could break ground in the fall of 2016 and be completed by early 2019.

The discussion on public benefits is not new in Menlo Park. The topic came to the forefront in the last specific plan review two years ago when city leaders mulled ideas including a fee-based formula.

The subject has also been raised in another front these days—the current effort to update Menlo Park’s General Plan, which serves as a comprehensive blueprint for the city’s future physical growth.

A revised General Plan could further call for future development to support and contribute to educational, transportation and other programs that help the community.

“Wherever the development is taking place, that’s where funds should be set for public benefits,” said Rose Bickerstaff, a Menlo Park resident and Realtor. “Wherever the impact happens, we want to see something come from that developer.”

Other Silicon Valley cities have been pursuing the idea of enhanced public benefits. Cupertino, for instance, has been checking into a competitive process in which proposed projects are weighed against each other for development rights based on public benefits, sustainability features and other elements.

In a competition for limited development rights in Mountain View’s North Bayshore neighborhood, professional-networking leader LinkedIn, technology giant Google and other applicants put out proposals with multimillion-dollar public-benefit packages. In the end, LinkedIn won most of the more than 2 million square feet of commercial space offered.

In a free-market system, Burke said, putting additional land up for bid “is fine,” but given today’s corporate powers such as Google, the danger is that “all the extra square footage would go to offices” versus retail or more diversified uses.

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