Menlo Park: Proposed office complex would bring traffic plus revenue

The Menlo Park Planning Commission recently took a look at the draft environmental and financial impact analyses for a proposed project that would, eventually, help revitalize the city’s M-2 industrial district.

The Sobrato Organization submitted a proposal in 2012 to build a corporate center at 151 Commonwealth Drive and 164 Jefferson Drive, near U.S. 101, after buying the property from the former Diageo North America distillery. The company proposes to merge the lots into a single 13.3-acre site to construct two steel and glass four-story office buildings, with 867 parking spaces, a recreation area, and an outdoor plaza with chairs and water fountains.

“It’s our first foray into (Menlo Park),” a Sobrato representative told the Planning Commission on March 24. He said the company had tried several times, but wasn’t able to acquire the real estate needed before now.

At 259,920 square feet total, the office buildings would reach up to 62 feet in height, nearly double the current limit for the M-2 district, so the project would require a conditional permit. Another major concern is traffic, particularly along segments of Marsh Road and Chilco Street.

What the project doesn’t require, however, is a development agreement — a contract between an applicant and Menlo Park for community benefits in exchange for project approvals. The city can’t demand one, and so far Sobrato isn’t offering. But the concept did surface during the Planning Commission’s discussion.

Commissioner Vince Bressler noted that he found it “kind of unacceptable that we just keep piling on the traffic and the answer is, well, we’ll do something on the next project.” He said he didn’t know how the project could get approved without a development agreement or some other mechanism to make the added traffic worthwhile to the city.

“We have to justify why this is worth enduring,” he said.

Other projects in the M-2 district, such as Facebook’s two campuses and the Menlo Gateway complex, came with development agreements, but also required more exceptions to the city’s zoning regulations, according to staff.

Commissioner Henry Riggs compared the ever-increasing traffic impacts to waiting for a bus that’s already full and can’t take on any more passengers at stop after stop. “At the third stop, you kind of ask what’s wrong with this picture?” The other projects all came with traffic impacts of their own that could not be completely mitigated, he said, so what’s left to try?

Senior Transportation Engineer Nikki Nagaya said that each development is responsible for one set of mitigations, such as restriping an intersection, leading to incremental improvements.

In past discussions, Sobrato representatives have questioned paying potentially $3.8 million in traffic fees when they estimate the impacts could be mitigated by much less — $300,000 to $500,000 — in light of the financial benefits the center would bring to Menlo Park.

Sobrato Development Director Richard Truempler estimated in 2012 that the project would yield $100,000 in annual benefits for Menlo Park, plus $163,000 for the fire district and $135,000 for the Sequoia Union High School District.

The draft fiscal analysis reviewed by the Planning Commission hewed closely to those figures in two categories — the city’s general fund would see an annual revenue increase of $138,900 and the school district would get $111,700 a year but the report projects a revenue bump of only $15,200 for the fire district.

The public comment period for the draft environmental and fiscal impact reports, which are posted on the city’s website, ends on April 14.