Menlo Park faces lawsuit, state pressure over city-stalled mega-project

Menlo Park faces a developer's lawsuit and pressure from the California Department of Justice over a stalled mega-project at 80 Willow Road, the former Sunset Magazine headquarters, which would include 665 homes, offices, shops, restaurants, a hotel, a preschool, and open spaces. The developer, led by Oisin Heneghan, plans to sue the city for noncompliance with state housing laws, while the state Attorney General's Office asserts the city violated AB 712, AB 2011, and the Housing Accountability Act, and unlawfully required the developer to pay approximately $300,000 in city attorney fees.

Getting your Trinity Audio //trinityaudio.ai player ready...MENLO PARK — Red tape that has snarled a Menlo Park mega-project of towers and homes at a high-profile site faces a developer’s lawsuit and legal pressure from state justice officials. The emerging legal battles arise from a proposal to develop a massive mixed-use development https://www.mercurynews.com/2023/07/28/menlo-park-home-housing-tower-office-hotel-build-develop-economy/ at 80 Willow Road in Menlo Park at the former headquarters of iconic Sunset Magazine. The development would produce 665 homes along with offices, shops, restaurants, a hotel, a preschool, and open spaces, a project that would feature multiple towers that would spring skyward https://www.mercurynews.com/2024/05/31/new-renderings-show-big-plans-at-former-sunset-magazine-campus-in-menlo-park/ next to upscale residences. Now, the project’s applicant, a group that includes principal developer and former Trammell Crow executive Oisin Heneghan, has notified Menlo Park leaders that it has decided to file a lawsuit against the city. The development group intends to “commence legal action against the city to enforce the city’s compliance with the state’s housing reform laws,” according to an Aug. 3 letter from law firm Allen Matkins Leck Gamble Mallory & Natsis that sketched out plans for the litigation. Separately from this, the state Justice Department has issued a letter to Menlo Park that asserts the city violated state laws that were crafted to encourage new housing development and hobble the ability of cities to impede residential projects with bureaucratic obstacles. The developer’s lawsuit and the intervention by the state Justice Department could determine the extent to which state laws that were created to encourage and streamline housing projects can curb a city’s control over zoning and development. The letter from the state Attorney General’s Office also asserts that Menlo Park improperly changed its reasons for denying a streamlined approval process for the residential portion of the project. State justice officials also claimed that Menlo Park forced the developers to pay the city attorney’s legal bills in supporting the municipality’s obstructions against the project. The development group has been attempting to use a “builder’s remedy” provision that can allow developers to pursue, through a streamlined decision-making process, projects of virtually any size in cities lacking approved plans to meet state-mandated homebuilding goals. At the time the project was floated in 2023, the state government had not yet issued its approval of Menlo Park’s housing element. The fight over the project began just over two years ago. During that time, Menlo Park officials claimed the project did not require a streamlined approval process, violated environmental rules because it could damage wetlands and local habitats, and raised concerns that the three towers in the development would be too high. Menlo Park officials also obliged the development group to pay the city attorney’s legal costs in the ongoing battles related to the project. Both the Attorney General’s Office and the development group denounced the city’s demand for the payment of the legal fees. “The city’s practice of requiring applicant to pay the city attorney’s fees is unlawful,” the legal team for the developer stated in a letter to the city. “To date, applicant has paid city attorney charges totaling approximately $300,000, which the city is obligated to refund.” The State Attorney General’s Office bluntly told Menlo Park officials that the city had violated provisions of AB 712, AB 2011, and the Housing Accountability Act. AB 712 requires the courts to penalize cities that fail to follow state housing laws if state justice officials warn the city that it violated such laws. “The City is evaluating the opinions expressed in the Attorney General’s notice regarding the manner in which the Attorney General believes the city should handle the development application for the 80 Willow project,” Menlo Park stated on its Instagram account. In the Attorney General’s view, Menlo Park illegally raised fresh objections to the project after its initial review and assessment of the proposed development. “The city will continue to evaluate the application and the Attorney General’s notice,” Menlo Park officials stated in the IG post.