The Oddyssey

Poornima 3 April 2010 Portfolio, Sustainable living 2 Comments

MENLO PARK – Mayor Richard Cline recently said that a group of downtown business owners have launched a “silent but stealthy cold war” on two key development projects in the city.

Downtown businesses and property owners that have dominated the cityscape for decades are resisting high density office and real estate development along Santa Cruz avenue, the main artery running through the heart of the town and along El Camino Real, the highway connecting Menlo Park to the Silicon Valley. Both projects have languished in the backburner waiting for council approval for several years due to this.

“This is the fourth time we are trying to come up with a blueprint to develop the downtown area. When the 2020 visioning process began in 2007 we had planned to finalize the proposals in 18 months. But now after almost two years we are still stuck with a set of proposals with nothing concrete,” he said.

According to Mr. Cline, the downtown plan includes a two-phase, 20-year implementation program, with costs split between the city, property owners, and commercial tenants. The first phase includes re-allocating 168 surface parking areas alongside Santa Cruz avenue for high-density office and retail purposes. Three multistory parking structures would be built to compensate for the lost space.

The city has now stretched its deadline to October 2010. It estimates that this three-and-a-half year planning cycle would cost $1.16 million.

Mr. Cline said that the first attempt to remodel the downtown area in 1972 was shelved after the Draeger’s market and Flegel’s Fine Furniture, two of the oldest businesses in the area, refused to come on board.
“The issues that residents are now debating haven’t changed much from that 1970 study. Should the city allow for taller buildings, if it results in more open spaces? Should it widen sidewalks at the risk of increasing traffic congestion? Should it build parking structures, and figure out some other use for some of the 45 acres of surface parking lots downtown and along El Camino? The debate has stayed the same because the city’s development has stagnated in the past 30 years,” he added.

The “Center City” design guidelines drawn up in the mid-1990s have sat on a shelf ever since. The ambitious “Smart Growth” planning effort in the late 90’s crashed even before the report was finished, when the consultant Marcia McNally quit over pressure to justify her conclusions.

The planning efforts for downtown Menlo Park have largely been restricted to the city’s general plan, adopted in 1952 and revised several times since. The maximum allowable building height of 30 feet in the downtown area and along El Camino Real has not changed since the 1967 revision, according to assistant city planner Thomas Rogers.

Rogers said that this helped sustain the “serene small town quality” of the city, with an estimated population of just over 30,000 with a median family income of $133,251 per anum according to 2008 census estimates.

But the city has struggled to buttress its sales tax base after four auto dealerships folded in 2005 and 2006. The downtown merchants have also expressed concerns about plans to develop these sites, that were left vacant for several years.

The city approved the development of a 3.4 acres plot north of Oak Grove Avenue, a former Cadillac dealership last October after sending the developer back to the drawing board twice.

Jeff Warmoth, a Development Partner at Sand Hill Property Co., said that his company acquired this 1300 El Camino Real property in 2005 and had to change their development plans several times because the city caved under pressure from opposition groups.

“We submitted our first proposal for the plot in February 2007. We were trying to move fast because we had a contract with Whole Foods to develop a 58,00 square foot retail space, with housing. But we couldn’t get the approvals on time to deliver according to the client’s requirements,” Mr. Warmoth said.

The Los Alto based developer now plans to build 51,000 square feet of retail space and 59,000 square feet of office space.

“The proposal envisions a combination of retailers, restaurants and a gym,” he added. The developers dropped the project’s housing component during the second revision.

Richard Dreager, Vice President of Operations at Draeger’s market raised concerns about scratching the housing component off the 1300 El Camino real site.

“Menlo Park has ignored the housing standards specified in the regional housing needs assessment for the past seven years. The housing deficit has rocketed to1900 units,” he said.

He also feared that adding more grocery stores to Menlo Park would not add to the city’s sales tax revenue. “If you crowd out the market with two many similar players, you are only diluting your tax base not increasing it,” he said.

He added that Safeway, a national grocery chain just added 13,000 square feet to its Menlo Park outlet last year, making it the biggest retailer in the area. “The Draegers market is only 24,000 square feet. So Safeway just added almost half the size of our store to their operation,” he said. The family business that started in Menlo Park in 1952 also faced competition from Trader Joe’s, located just two blocks away.

Mr. Draeger noted that the new El Camino site would triple the retail space in the downtown area. He feared that the family-run store may have to fold its Menlo Park operations if increased competition made the business unfeasible.

“The city has not even studied whether there’s a market for additional retail,” he said.
In 2006, Draeger’s and Beltramo’s Wine spearheaded a movement that successfully kept a nationwide retailer Beverages & More (BevMo) out of Menlo Park.

During the public hearings for 1300 El Camino Real last year, John Beltramos, a co-owner of Beltramos Wine complained that high-density projects pushed out small scale developers that opted for low scale constructions. “The city council’s regulations state that 10 percent of all development projects should be allocated for Below Market rate housing. This puts a greater burden on smaller developers as their unit cost shoots up. So the city council should either change this rule or not encourage high density development,” he said. Beltramos wine located 1540 El Camino, just a few blocks away from the proposed development site at 1300 El Camino, had earlier planned to expand their retails space and add a few low density commercial housing units to their property in the area. But Mr. Beltramos said that the commercial housing component would now have to be scrapped because high density development had poached any profits he could have made from that plan.

The business owners group have complained to the city council about the “lack of community participation” in the development decision making process.

“We have requested for meetings with council members but only one out of the five have even replied to this request,” said Mark Flegel, second generation owner of Flegel’s Furniture. “They are simply trying to sidestep the concerns of the community and steamroll projects that would completely change the characteristic of Menlo Park,” he added.

The group recently collected over 1000 petitions against the downtown development proposals for Santa Cruz avenue.

The 1300 El Camino project has also got stuck due to a legal issue. Developer Jeff Warmoth said that to an unnamed party had launched an information lawsuit, requesting for more data on how the project’s environmental impact assessment was carried out.

Mr. Warmoth calls it “greenmailing”. “These are simply tactics used by disgruntled groups just trying to stall the development with what ever means they can,” he said.