Menlo Park development: City seeks clarity on 'public benefit'

City negotiates with builders to provide these benefits in exchange for extra development rights

The quest to define "public benefit" in Menlo Park struggled onward during an April 14 council study session.

Public benefits are community improvements that the city asks a builder to provide in exchange for extra development rights. Broadly, the term means "something that enhances public well being," according to Michael Yarne of Build Public (formerly Up Urban), the consultant hired to oversee an update of the city's economic development blueprint.

But what does that translate to in terms of concrete benefits residents can see, touch or otherwise enjoy? Both developers and the community would like more clarity on that, according to Mr. Yarne.

Currently Menlo Park determines public benefit for each project that requires it. "Ad hoc negotiations impact the public trust because no matter how hard you try to make it transparent, there is a sense that a deal was struck, and it's not always clear that it was a fair deal," Mr. Yarne said.

The council subcommittee's negotiations with Stanford University, for example, have been dogged by residents who think the university's real estate division is taking advantage of the community. Stanford's proposed El Camino Real mixed-use complex is not seeking extra development rights in exchange for providing public benefits, but the voluntary negotiations with the city have led to doubts among some residents about fairness.

An alternative to the ad hoc approach would be to create specialized districts, such as infrastructure finance districts, into which property owners make payments over time for upgrades. That can leave one developer carrying most of the cost for upgrades that others will benefit from. Also the multiple landowners can make them complicated to administer.

The state allows cities to assess impact fees for new development, but the caveat is that the money can't be used to correct existing deficiencies.

"A lot of cities will just stick to a fee. ... that's great, and it does provide certainty," Mr. Yarne said, but the drawback is that fees are at the mercy of the economy. In a downturn, the fees present an impediment for developers, while in a good economy, they might not provide enough value to the community.

Another option is selling the development rights of one site's unused floor area ratio -- the ratio of floor area contained within the buildings to the total area of the lot -- to another property, as San Francisco allows based on a third-party appraisal of fair market value, he said.

Fire district

Menlo Park Fire Protection District Chief Harold Schapelhouman urged the city to take the fire district's needs into consideration as new development creates challenges for emergency personnel, in terms of access to tall buildings and response-time delays due to traffic. He acknowledged that the City Council is working on building a better partnership with the district.

Also speaking during public comment, resident Adina Levin pointed out that different neighborhoods have different priorities, so the city's benefit wish list should be tailored to individual areas.

Councilman Ray Mueller said he thought that was important to talk about, and that he was intrigued by selling floor area ratios. He also suggested forming a joint powers district with East Palo Alto to channel public benefit money into the Ravenswood City School District, which is in Menlo Park as well as East Palo Alto. The money would be used for teachers and educational programs rather than buildings, he said.

Mayor Catherine Carlton, along with fellow council member Kirsten Keith, agreed that school improvements are a high priority.

Now that the study session's over, what happens next in the city's efforts to improve its public benefit process? The updates for the general plan and economic development plan will incorporate the study session's information, as will the downtown/El Camino Real specific plan review scheduled for the end of summer, the city's staff said.

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