News

The other big project in downtown Menlo Park

Greenheart previews its 420,000-square-foot project on El Camino at Oak Grove

While attention has been focused on what Stanford University plans to build in Menlo Park, another developer has quietly acquired the long-empty site that used to be a Cadillac dealership at 1300 El Camino Real, along with the former Derry project site. Greenheart Land Company sat down with the Almanac to unveil "the other project" -- the mixed-use development of office space, retail and apartments it plans to build there on its 7 acres.

Greenheart principal Steve Pierce and real estate attorney Tim Tosta came by on Oct. 30 to go over the preliminary site design. Composed of 210,000 square feet of office space and 210,000 square feet of apartments, the project would include 16,000 square feet of retail in the commercial buildings and 7,000 square feet in the residential.

The office space is divided between two three-story buildings. Pierce thought likely tenants would be "walk-up services" such as insurance brokers. Retail would focus on destination restaurants and perhaps specialty food stores, he said.

Designed by BAR Architects, the complex "looks more Stanford than the Stanford project," with red tiled roofs and a Spanish flavor to the building design.

For comparison, Stanford and developer John Arrillaga want to build a mixed-use complex on 8 acres of land -- now mostly vacant car lots -- at 300 El Camino Real with 199,500 square feet of office space, 10,000 square feet of retail, and up to 170 apartments.

Unlike Stanford's project, Greenheart's proposal aims for the bonus level of allowed floor area ratio at 150 percent, rather than the 110 percent, which would let the two office buildings go to three stories -- 48 feet -- with the top stories setback. With residences on nearby Merrill Street going up to 46 feet, Pierce said, Greenheart's scale is in line with the surrounding neighborhood.

"There will be public benefit," he said. Greenheart plans to submit the proposal to the city this week to start the evaluation process for figuring out what the benefit could be.

The residential portion of the development consists of 215 apartments with an average 825 square feet each. Sixty-seven percent will be studios or one-bedroom units; 30 percent two-bedroom apartments; and the remainder will have three bedrooms.

Acknowledging that selling luxury condos in the overheated Menlo Park real estate market would be easy, Pierce said Greenheart consciously decided to go in the opposite direction with rental housing targeted at young professionals without families, a demographic underserved by the city's current housing inventory and that tends to live in Palo Alto and San Francisco instead.

Also a factor in the dispersion of young workers is the city's lack of vibrant nightlife. Greenheart hopes the retail and restaurant aspect of its development helps correct this.

The company will retain control of the complex after construction, according to Pierce. "We build it, we own, we live it." Both he and partner Bob Burke have spent many years in the area, he said, so they looked for projects that would add value while maintaining "a nice living environment."

The preliminary design shows three public gathering spots: an office plaza off El Camino Real that could incorporate outdoor dining; a plaza near Oak Grove and Merrill Street; and a park bordering surface parking off Garwood Way.

Speaking of Garwood Way, Greenheart plans to renovate the street and add a bicycle/pedestrian path to connect with the Caltrain station on Merrill Street. That could require some negotiating with the nearby Marriott Residence Inn, which holds a five-year lease on 39 public parking spaces along that street.

"When we improve Garwood that parking will go away," Pierce said.

Menlo Park came under fire earlier this year for allowing the new hotel to reserve the spaces for its guests in exchange for meeting transient occupancy tax targets; after five years, the city is supposed to charge fair market rent for the parking spaces -- but only if Menlo Park's tax revenue from the hotel in a given year drops below $700,000.

At the time the agreement was approved, city officials stated the deal made sense because of low demand by the public for those spaces, and that the hotel's representatives said the spaces were necessary to make the project financially viable.

With Greenheart's plans, however, it may be time to look for another solution. Pierce said they're hoping that in five years those spaces won't be considered essential to the hotel.

"Studies are being done" to estimate the traffic volume created by Greenheart's development, Pierce said. The project's proximity to the Caltrain station should help decrease the number of car trips, and 95 percent of the on-site parking will be provided by an underground garage, with entries off El Camino Real and Garwood Way.

As for existing tenants on the Derry site -- which includes Foster's Freeze -- Greenheart said those leases were structured with the understanding that the property would eventually be sold and developed, and that it will honor those arrangements.

Greenheart paid $47.6 million for the 7 acres of land for its El Camino Real project. The company also recently acquired seven parcels for $8 million from the city's now defunct redevelopment agency as well as other lots between the Mount Olive Apostolic Original Holy Church and the shopping center at Willow Road along Hamilton Avenue. Greenheart plans to build apartments there as well, with approximately 30 housing units per acre.

The real estate company is watching the city conduct a review of the year-old downtown/El Camino Real specific plan with some trepidation. The new regulations are meant to give certainty to developers about what could be built and where, as opposed to Menlo Park's previous practice of leaving nearly everything up to the discretion of city officials, according to Tosta.

"We don't think the council will change the specific plan," Tosta said, but noted that if it does, that could delay Greenheart's project anywhere from six months to a year and a half. "One little tweak triggers levels and levels of review."

That makes developers a bit nervous. The last two projects approved on these parcels ran out of time as the economy nosedived; Greenheart doesn't want to wind up in a similar position.

"That's our greatest fear," Pierce acknowledged. "We have a great market right now."

Still, "if everything moves along smoothly," the company hopes to debut a new mix of housing, restaurants and office space in Menlo Park a little more than three years from now, in 2017.

Comments

 +   Like this comment
Posted by JoyOfGridlock
a resident of Menlo Park
on Nov 7, 2013 at 10:45 am

Arrillaga and Pierce have Menlo's planners in their back pocket. Let's see, how much worse can El Camino traffic get? Luckily these developers live far far away from their projects. It's all about dollars isn't it?


 +   Like this comment
Posted by moo
a resident of Another Palo Alto neighborhood
on Nov 7, 2013 at 10:50 am

Super. It already takes me 10 minutes to drive 1 mile up El Camino Real in Menlo Park. Might as well be midtown Manhattan.


 +   Like this comment
Posted by ConcernedResident
a resident of Menlo Park
on Nov 7, 2013 at 11:15 am

Do Menlo or Palo residents have say on go/no-go decision for these high density development projects or are these just back room deals done between greedy developers corrupt or short sighted city administrators/elected officials without putting it on the ballot?


 +   Like this comment
Posted by Jan
a resident of Old Palo Alto
on Nov 7, 2013 at 11:25 am

Right on queue we get the start of what will surely be a series of postings containing caterwaulings about traffic (there's too much traaaaaaaaaaaaaaafic). The hilarious comparison of this to Midtown Manhattan (if only Menlo Park and Palo Alto had any of the appeal of Manhattan--has there ever been two such selfish, self-centered communities who think the world revolves around their petty desires!!!!)
And of course the comments about "greedy" developers (according to PA and MP residents developers are greedy--but when they sell their homes at maximum profit, that is okay), "back room" deals and "corrupt" officials. Care to provide any proof for your claims of malfeasance, Concerned resident? I bet not.


 +   Like this comment
Posted by King
a resident of Menlo Park
on Nov 7, 2013 at 1:59 pm

Menlo Park has become a virtual ghost town because those who want to invest in the community are forced out by the same opposition that never ever wants to see change. If we don't invest in MP, this City is going to die on the vine like most of the worthless retailers who yearn for people to walk by their stores. Companies, like Cities, need to evolve and change in order to compete and be successful. This takes individuals who are willing to spend $$ and take risk.

Say what you will about Palo Alto, they have encouraged new development in downtown and that place is exciting and vibrant with lots of character. If they had listened to the no-growth proponents over the last 20 years, PA would be like Menlo...watching another yogurt shop come and go.
If traffic is going to be a problem then figure it out but don't kill the deal because you can't trust a developer that's trying to make money. By the way, they won't make money if they don't do it right. This is how capitalism works.


 +   Like this comment
Posted by curmudgeon
a resident of Downtown North
on Nov 7, 2013 at 2:15 pm

Apparently Greenheart has done its homework and hired a PR firm to work this forum.


 +   Like this comment
Posted by Steve
a resident of Menlo Park
on Nov 7, 2013 at 2:27 pm

@curmudgeon -
Easy to dismiss King's arguments with an unproven accusation. Would you care to take the time to explain what you find wrong with them?
Myself, I think King makes valid points. In reading the Almanac article, I'm actually quite excited at the possibility that the acres of vacant lots might be replaced with apartments that will attract young people and the businesses they will support. This is the most positive development I've seen proposed for the city in years. And yes, I do drive so I'm willing to accept that it will probably have some effect on traffic congestion.


 +   Like this comment
Posted by Silly
a resident of Embarcadero Oaks/Leland
on Nov 7, 2013 at 8:58 pm

And of course not a single car will be added to our already horrendous traffic gridlock.


 +   Like this comment
Posted by Robert
a resident of another community
on Nov 8, 2013 at 10:33 am

Clearly Palo Alto residents should not only have veto power over what gets built in their city, but in neighboring cities and the rest of the Bay Area, as it may have an effect on their traffic.


 +   Like this comment
Posted by Housing Advocate
a resident of Menlo Park
on Nov 8, 2013 at 3:24 pm

@JoyofGridlock
Developers in their back pockets? Maybe - though seems like a common and unsupported rebuff of residents against developers. That said, there's also an under supply of housing in the area. More available housing in the area might reduce the amount of commuting folks need to do because there are not enough houses to live in here. IMO, housing is a more pressing issue than the congestion along El Camino. The fact that congestion has and continues to be a main concern of residents demonstrates how removed many of the residents are of the realities of the community they live in. It is incredibly difficult to find housing in the area.

@moo
If you have the means, it takes about 5 minutes to bike a mile.


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