Primer on Measure M

By Kristin Duriseti

Yes on M? No on M? Menlo Park needs a change. Perspectives from a Candidate for City Council

Measure M is the issue of the Menlo Park City Council election, and since deciding to enter the race for City Council, I have spent the past few weeks talking to people on both sides of the debate, immersing myself in the details, and trying to sort out fact from fiction and pros versus cons. I hope that sharing with you what I have learned will help you make your own decision on Measure M.

I have decided to take a neutral position on Measure M because:
1. This is a voter initiative, and we should take this opportunity to hear from our residents regarding personal preferences over the two major development proposals on El Camino Real that are currently under review.
2. A better question for Council Candidates is, "What will you do next?" The City Council will never vote on the Measure, but will have the opportunity to weigh in on any modifications to the development proposals and determine any amendments to the Specific Plan itself.

That said, I do think that the Specific Plan (SP) needs to be modified to bring it back in line with the approved goals of the Visioning process that were accepted by City Council, such as:
1. providing for public open space in the SP area (which may need some flexibility for smaller parcels),
2. improving the jobs-to-housing ratio because

• the possibility of living and working in close proximity is valuable, and
• imbalances will result in state penalties, such as reduced transportation funding,
  3. zoning for smaller housing units,
  4. specifying mechanisms for public benefits,
  5. limiting the potential for "big box" retail,
  6. addressing directly the traffic impacts of development (perhaps through a Transportation Demand Management Program), and
  7. lowering the level of "by-right" development to reestablish negotiating leverage, especially vis-à-vis Stanford.

This restriction would affect only the two properties with development proposals at 1300 (Greenheart) and 500 (Stanford) El Camino Real and potentially the "Big-5" retail center across from Safeway. Measure M would not limit the amount of development rights per parcel, but would impose a different mix of development across residential, office, and retail (and hotel) uses. Why should this matter?

What I have discovered in talking with residents is that by and large Menlo Park residents share a common interest in wanting to be able to dine and shop in Menlo Park rather than heading out to Palo Alto or Los Altos. Developers, on the other hand, prefer the higher rents and relative security of office; retail is a riskier investment. In any case, both development projects will provide the necessary boost in the customer base to support downtown retail businesses with a different mix of foot traffic from office workers (primarily daytime) and residents (primarily evenings and weekends).

An important corollary is the impact on City revenues. Development improvements will increase the property tax received by the City, but retail generates additional sales tax revenue that office space generally doesn't. The Wise report commissioned by the City to analyze the impacts of the initiative supports the conclusion that retail is a net revenue generator vis-à-vis office. The difference in revenue streams compounds over time since sales tax revenues adjust for inflation, but property tax growth is flat.

The Specific Plan was meant to encourage a density of development that will revitalize the SP area, which is one of the primary objectives in the goals of the Visioning process. The intention of the SP was to incentivize development by "up-zoning," i.e., increasing the amount of allowable square footage for development. Aside from limits on the number of housing units and overall square footage for non-residential development, market forces would determine the composition of the development.

As part of the extensive analysis and review process, the Environmental Impact Report (EIR) examined a profile of development uses that formed the basis for the assessment of impacts on traffic, finances, and schools. The profile allotted roughly half the non-residential development to office space and the remainder was split between hotel and retail (this is the source of the total office cap of 240,820 sf in Measure M). This "illustrative" case was fully vetted by Council, Commissions, and the community.

Unfortunately, the SP analysis relied on faulty assumptions about the value for office space that were at least somewhat apparent at the time. As a result, the two proposed development projects by Greenheart and Stanford oversupply office space relative to the EIR by roughly 40,000sf and crowd out the potential for shopping and dining in the SP area. If these two development projects proceed as planned currently, there remains only 105,000 square feet in the non-residential cap for the entire SP area, but 166,000 square feet of unmet demand for retail and hotel as provided for in the SP case study. If one includes the lost retail space that had been approved for the Greenheart property, the total unmet demand for retail (as evaluated in the Specific Plan EIR) is roughly 200,000sf versus the 105,000sf of available space left in the overall cap for non-residential development in the entire SP area.

Thus, the question of "mixed use" is not limited to these two, specific projects, but extends to the entire SP area as well. What I hear from developers is that they need the revenue boost from office space in order to essentially subsidize the lower rents received from retail and restaurants. If this is truly the case, then I wonder whether revitalization of the downtown area, which was also a primary object of the Visioning, will require additional allocation of office space and eat away further at the remaining square footage available.

At the time the Specific Plan was approved, the question of development rights was discussed. The incumbents decided to double the development rights and argued that they would consider future reductions in this level, if warranted. While I would argue that this is a backwards way of negotiating, I think it is fair to say that the recently released traffic impact study of the Stanford development proposal demonstrates unequivocally the necessity of reducing the overall level development without significant and specific public benefit, which should include more public space, increase retail, and an aggressive traffic reduction program. Stanford already has a lot of experience in the last category, and the bike tunnel should be a centerpiece of that discussion. I agree that Menlo Park should apply for grant funding of the bike tunnel, and I would suggest that Stanford pay for the staff time to pursue those applications and agree to pay for any remainder as part of meeting their own traffic reduction requirements for project approval.

Lastly, there's the controversial voter approval rider, required to raise the caps for office and non-residential development and change the definition of public space. I understand the concern with "ballot box" governance, but this should be put in context of the fact that there is a built-in trigger to amend the SP once development reaches 80% of the cap. Already, we are virtually at that threshold trigger, and we will have to reevaluate the limits contained in the Specific Plan, including an EIR. It would be foolish for City Council to allow the onus of that undertaking to fall to an individual property. I don't think that we should be afraid to put an amendment of the Specific Plan to a vote. If the Council cannot secure support from the public, then one must wonder about the validity of the proposal itself. City Council just voted in over a million square feet of development in the SP area (not to mention the additional development projects in the Belle Haven/M2 area and in our neighboring cities of Palo Alto and Redwood City). Is it too much to ask that the voters have a chance to weigh in? If the initiative reflects mistrust of Council, then concern about voter approval reflects mistrust of the voters.

The decision facing voters isn't easy and each outcome will have different consequences that must be weighed and considered by the voters. Because of the inherent zero-sum nature of the overall SP area development cap, there is no way to get around this divergence in interests and competition for scarce and valuable land rights, but this is an issue of choice, and the ballot measure is an opportunity to take the pulse of Menlo Park. The arguments on both sides venture into the area of speculation and value judgment concerning traffic, public benefit, schools impacts, and "big box" retail, but these are outstanding, unresolved in the Specific Plan itself and not failures of the Measure, per se. The Council has had and will continue to have authority to make these modifications.

Irrespective of the vote on Measure M, implementation of the Specific Plan will require continued vigilance from the council to ensure that the realization meets the vision.