Menlo Park's plan to build affordable housing on its downtown parking plazas will need a lot of public money. Consultant Strategic Economics reviewed three developer proposals for Parking Plazas 1, 2 and 3. It found that each one leaves a subsidy gap of between about $19 million and $45 million.
What the city wants
The city's goals call for 345 affordable homes for households earning 15% to 80% of area median income. It also wants 556 public parking spaces kept downtown. The land would be offered on a 55-year ground lease for $1 a year.
The three proposals
Alliant's gap is about $20 million. It proposed closing it with soft debt, a loan of impact fees and $10 million to $15 million in state funds. Presidio Bay's gap is about $45 million. It suggested waiving about $20 million in fees and using about $20 million tied to its 345 Middlefield project at the former USGS campus, with no state money. Related/Alta's gap is more than $19 million even with $29 million in state funds, and the team did not say how it would close the rest. Some of the state funding depends on Prop. 1, an $11 billion housing bond on the Nov. 3 ballot.
What council members said
Mayor Betsy Nash called the findings disappointing. Council members discussed several ways to close the gap: less parking, fewer or less deeply affordable units, a special tax district or a sales tax. Council members Taylor, Wise and Schmidt opposed cutting parking. Schmidt said she was open to a sales tax or a general obligation bond. Wise floated a storefront vacancy tax and said she had always expected the city would need to contribute. Nash and Schmidt favored paid parking. Council member Combs put it plainly: the piper has to be paid.
What happens next
The Sept. 29 study session ended without votes. Staff will bring funding options back together with the evaluation of the proposals, so the item will not return to the council in October. If Measure P passes, voters would have to approve housing on the lots. Background: our Measure P explainer.