Almanac

News - July 27, 2011

Affordable housing project terminated in Menlo Park

by Sandy Brundage

Ten years ago, Habitat for Humanity bought property at 297 Terminal Ave. in Menlo Park to build affordable housing. On July 19, the Menlo Park City Council killed that dream with the nonprofit's blessing.

"The Habitat project is dead, no pun intended," Deven Richardson, the nonprofit's Bay Area real estate director, said.

Habitat for Humanity envisioned a complex of 12 to 22 homes on the 1.5-acre site, but faced neighborhood opposition from the start as well as financing difficulties. Some of the loudest protests came from Beechwood School, a private Belle Haven facility for grades K-8, which needs the land to expand its campus.

The project ran up a tab despite stalled construction. Menlo Park already spent $998,000 on environmental remediation to prepare the site for housing, while Habitat for Humanity paid $481,590 to buy a home on the parcel to get access to the building site.

That $481,590 is what the council agreed to pay to buy back the property. That price, the city staff admitted, was above market rate, but the city is contractually obligated. The council vote was 4-0, with Mayor Rich Cline absent.

The funds were drawn from the city's affordable housing program fund and will need to be paid back to that fund should the site be sold for a different purpose.

Menlo Park Housing Manager Doug Frederick said his department hasn't decided yet what to do with the property. Money has been a sticking point in negotiations with Beechwood School; the city wants more than the school has offered to date.

According to the staff report, Menlo Park could also choose to retain the property for affordable housing or sell it at market rate. The council expects to receive a recommendation for its disposition in the early fall.

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