"Business has quadrupled," said Karla Oliveira, the proprietor of the Build It Again Lego store she opened briefly in Menlo Park last fall before packing up shop for a new location in Los Altos within months.
Why? In Menlo Park, the rent cost $6,059 a month, with no parking and no storage space included. Down the road in Los Altos, she's paying $3,900 a month. And the new location comes with more foot traffic.
"(Los Altos) has everything here -- a restaurant that kids can play in while you eat, a bakery, a hobby store, a museum, a new bookstore centered around kids," Ms. Oliveira said. "It's known as a mecca for people with kids."
Menlo Park, on the other hand: "There's not enough other activities to draw kids downtown," she said. Build It Again, thanks to classes, parties and allowing parents to drop children off, did find a crowd of regulars in Menlo Park that Ms. Oliveira misses, but that wasn't enough to offset the difference in rent.
The city doesn't seem to have trouble attracting business: According to its latest economic report, Menlo Park's retail vacancy rates hover around 1.3 percent, lower than San Mateo County's average of 1.7 percent.
But sometimes, as the experiences of Ms. Oliveira and other proprietors demonstrate, keeping business can be a bigger challenge. During the past year, Lisa's Tea Treasures and Pendleton Woolen Mills also relocated to Los Altos. The iBar eyebrow-threading business moved to Palo Alto. While the restaurants Refuge and Borrone MarketBar opened, Menlo Hub shut down.
Menlo Park has seen its retail vacancy rate drop a lot in the last year, pointed out Jim Cogan, the city's Economic Development Manager, but there's a lack of data on retention. Individual business models play a role in differentiating retailers that leave from ones, such as Cheeky Monkey and Flegel's Home Furnishings, that stay. "Our rents are high not as high as Palo Alto or the Stanford Shopping Center, but up around $5 per square foot per month," Mr. Cogan said. "That can be a tough nut to cover for a lot of retail."
Some of the newer retailers, for example, Menlo Hardwood, told Mr. Cogan that they love the market, but aren't convinced there's enough foot traffic downtown to support them.
The retention challenge isn't limited to retail. Menlo Park's office space vacancy rate -- 10.9 percent -- remains almost double that of some neighbors, including Mountain View and Palo Alto, although it is below the county's 13.9 percent, and has dropped this year, according to data from the city.
One factor is the type of office space available: Cities with space near public transit and downtown amenities are seeing skyrocketing demand. Menlo Park, on the other hand, is short on exactly that type of space.
Chris Andrews moved his financial planning business from downtown Menlo Park to Redwood Shores in September. For nearly identical square footage, he told the Almanac, he pays $50,000 less each year for rent now. And he is in a location with amenities such as an employee gym, picnic areas and a free shuttle to Caltrain -- "all good things for office culture," he said -- as well as abundant free parking with no time limit.
"The parking was an increasingly annoying concern in Menlo Park due to the lack of available spots for clients, the short time frame for parking along Santa Cruz Avenue, and the rigorous enforcement of the spots by the ticketing authorities," Mr. Andrews said. "It is very difficult to condense a financial planning meeting into exactly 60 minutes with clients."
He racked up numerous tickets and described them as the secret cost of living and doing business in downtown Menlo Park. "In the case of our office, I paid a handful of tickets, but my clients paid a lot more."
Mr. Andrews suggested converting most of the downtown parking to two-hour slots, while reserving a handful of spaces along Santa Cruz Avenue for 15- to 30-minute spaces for errands.
"I think this will go a long way toward supporting local businesses like ours that aren't simply storefront (or) retail-based," he said. "Restaurants will love it too, because their clients will almost always want to spend one hour plus at lunch and dinner."
Menlo Park did change its downtown parking layout nearly three years ago, adding pay-by-the-hour meters to Plaza 1, off El Camino Real and Oak Grove Avenue, and Plaza 5, off Crane Street and Santa Cruz Avenue. The first two hours of parking are free, with the option to buy up to seven more hours. The city limited spaces on Santa Cruz Avenue and some side streets to one hour, and created some 15-minute drop-off zones.
The city staff recently said a review showed the changes were working as planned. But after looking at the data, the council questioned whether parking enforcement is too aggressive: Menlo Park overall averages 5.9 tickets per parking space annually. Santa Cruz Avenue is nearly twice as high, with 11 tickets per one-hour space each year.
Los Altos averages 1.21 and Redwood City, which has a parking garage downtown, averages 5.31. Only Burlingame, with 12.5 tickets per space per year, ranked higher than Menlo Park out of the five Peninsula cities considered.
In many ways, Los Altos embodies what Menlo Park aspires to be. The two cities have about the same population, and both rezoned areas to revitalize their downtown districts, but in Los Altos, the changes are creating an inviting, bustling ambience.
Several years ago, Los Altos eliminated some of the floor-area-ratio and height restrictions to allow a wider range of mixed-use projects downtown. Commercial buildings in the downtown core may be 30 feet in height, while those on the perimeter could go up to 45 feet. It invested in wider sidewalks, new landscaping and street furniture. Investors spruced up building facades, and kid-oriented businesses, such as an arcade for teenagers and a restaurant with a play area, popped up.
"I think it's starting to blossom," said Los Altos City Manager Marcia Somers. A larger Safeway will debut in July, followed by an 18-room boutique hotel at the other end of downtown in September.
A 48-unit condominium complex is also in the works, and in early 2015, a 31,000-square-foot office and retail development on a 0.9-acre lot will open. The city expects those retail slots to fill quickly, based on the number of inquiries from prospective tenants, and also anticipates more restaurants and other businesses arriving as the condos bring more residents to downtown.
"People are starting to say, hmm, what's happening in Los Altos?" Ms. Somers said.
Parking in downtown Los Altos consists of two-hour spaces on the street and three-hour slots in the plazas in an attempt to strike a balance between encouraging customer turnover and giving people enough time to dine and shop during the same trip.
Ironically, in this case, Los Altos may be looking to Menlo Park for inspiration, according to Menlo Park's transportation staff, which reported that Los Altos only sends a parking officer out when someone complains of a violation, and business owners there are arguing that police should make enforcement a higher priority.
Menlo Park revamped its zoning with the downtown/El Camino Real specific plan, but the ballot initiative looming over the November election has thrown some cold water on the enthusiasm that Jim Cogan heard from potential investors last year.
"The critical mass that the (Stanford and Greenheart projects) would create is what people base their risk-taking on," Mr. Cogan said. "The cost of land is so high -- the Applewood site, which is small and has no parking, was on the market for $3.2 million. So for an investor to take a risk on buying a similar property, they need to be sure the critical mass is there and that they can get through (the development) process in this economic cycle. If those two things aren't there, it's a bad investment."
That said, investors remain interested, according to Mr. Cogan, including two hoteliers with proposals that could pencil out financially with or without the Stanford and Greenheart mixed-use developments in place, although "they're definitely excited about the prospect of having the jobs that those two projects would bring. It makes sense to have hotels near employers."
Menlo Park's reputation as one of the three cities forming the hub of Silicon Valley and its proximity to Stanford University are huge competitive advantages, according to Mr. Cogan. "If the specific plan is built out even at the base level, it will create the job opportunities and housing that the next generation of folks is looking for, and Menlo Park will retain that mantle. Without that, it's a little unclear."
The city is also revitalizing downtown from a consumer perspective. Menlo Park has had annual events such as the block party and the Connoisseur's Marketplace for a while now, but the city's been expanding its slate of programming to see whether more events equals more customers.
Off the Grid, a weekly food truck event, launched in February over the protests of some downtown merchants. It's already paid off. The city's latest economic report estimated that the event draws 900 to 1,000 visitors each week. Khephra Molloy, who manages Left Bank Brasserie, confirmed that the restaurant has added another server on Wednesday nights to handle the bump in business on food truck nights.
The monthly 100OCT Cars & Croissants show, a pop-up art gallery on the now-vacant Tesla lot, a pilot program to expand outdoor dining along Santa Cruz Avenue, and a new quarterly small business roundtable are other recent attempts to bolster the downtown economy. Also on the horizon: local restaurateur Rob Fischer's renovation of the landmark BBC at 1090 El Camino Real.
People may be asking what's happening in Los Altos, but Menlo Park is catching some buzz, too. "You gotta come see this," one guy commented during a phone conversation at the May 3 car show, Mr. Cogan said, which is the kind of attention that gets retailers excited.
He's already planning some new events, perhaps one with a fitness theme, and another focused on home decor at the suggestion of local merchants.
"Anything that brings new customers into town, I think, is great. I am happy to try anything, and I'm all about making new and exciting mistakes," he said.