The long fight over a proposed high-rise development on the former Sunset Magazine campus in Menlo Park is now in court.
San Francisco-based N17 Development sued the city in San Mateo County Superior Court on Friday, Oct. 2, The Almanac reported. The lawsuit asks a judge to require Menlo Park to approve the project, called Willow Park, under a group of recent state housing laws.
The project
The plan for the 6.7-acre site at 80 Willow Road, on the corner of Middlefield Road and backing up to San Francisquito Creek, calls for tearing down the existing buildings. In their place would go 665 apartments or condos, about 100 of them priced below market rate, plus roughly 332,000 square feet of office space, 17,000 square feet of retail, a 130-room hotel and a preschool, according to KQED and The Almanac. City figures cited by KQED put the tallest buildings at 301 to 458 feet.
N17 proposed the project in late 2023 under the "Builder's Remedy." That provision of state law lets developers skip most local discretionary review when a city doesn't have a state-certified long-term housing plan.
The arguments
N17 argues that the project qualifies for streamlined, "ministerial" review under Assembly Bill 2011, which would mean the city can't simply say no. Echoing a July warning letter from Attorney General Rob Bonta's office, the suit alleges that the city kept changing its reasons for denying streamlined approval. It also asks for a refund of about $300,000 in legal fees the city asked the developer to pay.
The city disagrees. Mayor Betsy Nash told KQED that Menlo Park isn't rejecting the project and is continuing its review in the standard way, including a full environmental impact report. She said N17 has declined to pay for that report. City leaders also argue the project doesn't count as housing under updated state law because it includes a hotel. A day before the lawsuit was filed, the city sent the attorney general a 65-page response defending how it handled the application. City spokesperson Kendra Calvert told The Almanac that the lawsuit is based on inaccurate assumptions.
What's at stake
Under AB 712, which took effect in January, a city that loses this kind of case after receiving a state warning notice must be fined $10,000 per housing unit, KQED reported. For this project, that would be at least $6.65 million, a large sum for a city of about 32,000 people with an annual budget of roughly $90 million.
The property's ownership has also drawn scrutiny. The Almanac reports that the owner is Vitaly Yusufov, a Russian businessman with ties to Russian government officials, and that Rep. Sam Liccardo has called for a federal investigation. According to The Almanac, Heneghan told the San Francisco Chronicle the project is "not for sale."
UC Davis law professor Chris Elmendorf told KQED that if Menlo Park loses, it would be "a huge warning shot to all cities."