BY EMILY MIBACH
Daily Post Managing Editor
The developer proposing a skyscraper at the former Sunset Magazine headquarters in Menlo Park says the city is required to approve his project by the end of October and give him a refund of $300,000.
Council is set to meet in closed session tonight at 6:30 to discuss a letter Oisin Heneghan sent the city on Monday. In it, Heneghan declares that a warning from Attorney General Rob Bonta’s office about the city’s handling of his proposal at 80 Willow Road means under a newly enacted state law, the city must approve the project by Oct. 27.
The property is owned by Russian businessman Vitaly Yusufov.
Bonta’s office sent the city a letter on July 27 saying the city improperly changed its reasons for rejecting Heneghan’s proposal for 665 apartments, a hotel, office space and a preschool across three towers, with the tallest going up to 461 feet.
Both the letter from Bonta’s office and Heneghan cite Assembly Bill 712, which is aimed at punishing cities that do not follow housing laws.
Penalties can include a court imposing fines on the city and forcing the city to pay Heneghan’s attorney’s fees if he wins a lawsuit against the city.
The AG’s letter says the city has improperly made Heneghan pay for legal fees related to the project.
The letter, written by Deputy Attorney General Matthew Struhar, says it appears the services Heneghan and his company N17 have been paying for are not for lawyers to make sure the project is in compliance with state law, but rather for legal services in anticipation of litigation. Struhar also points out that some of the issues the city has had with Heneghan’s project are not in violation of the state laws he has invoked in his proposal, most notably the Builder’s Remedy.
In an unsigned statement posted on the city’s website, the city says it is “evaluating the opinions expressed in the AG notice regarding the manner in which the AG believes the city should handle the development application for the 80 Willow project. The city will continue to evaluate the application and the AG’s notice.”
Councilman Drew Combs pointed out in an email to residents yesterday that the letter does not “clearly identify what specific process or outcome the Attorney General believes the city should pursue.”
“Is the state actually suggesting that the city approve a project of this scale without additional analysis? That is an important question, and one that deserves greater clarity,” Combs wrote. “The Attorney General’s opinion does not dictate the ultimate outcome or eliminate the city’s ability to pursue any legal or procedural remedies that are available.”
Combs also says that he and Mayor Betsy Nash have spoken with State Sen. Josh Becker and Assemblyman Marc Berman about the AG’s letter to better understand where the local legislators stand.
But Heneghan is declaring victory.
“The Attorney General has made clear that Menlo Park cannot continue moving the goalposts or requiring a housing applicant to bankroll the city’s own resistance to approving housing,” Heneghan said in a statement. “The state has now rejected every remaining legal basis the city asserted for denying streamlined approval. We look forward to working with the city to finalize approvals and begin delivering much-needed housing.”
Heneghan says he’s been billed $302,938 in legal fees by the city.
This is the latest twist in the two-year battle between Heneghan’s company, the city and the project’s supporters and detractors.
This isn’t the first lawsuit threat related to the project. In December, YIMBY Law, a pro-housing group, sent a letter to the city threatening to sue over the city for changing the requirements for the project.
Heneghan and his associates have been trading letters with the city since the project was submitted. In May the city told the developer that its application cannot be processed, in part because the project includes a hotel.
Bonta’s letter, however, says that since the project was submitted to the city before Jan. 1, 2025, the hotel argument is moot since the state law the city cites in the May letter wasn’t in effect when the project was first submitted.
In February, Heneghan accused the city of slow-walking the proposed 40-story complex because it disapproves of the project.
The project is not a housing development because there aren’t enough housing units, and even if it were categorized as a housing project, the city has not “disapproved” it by delaying it, Community Development Director Deanna Chow said in response earlier this year to N17’s attorney, David Blackwell.
But the city has contended they’re not alone in holding up the line. The city said in a May 14, 2025, letter that N17 had $799,951 in outstanding fees before the city could to begin work on the environmental impact report, the next step, according to Chow.
Blackwell, from the Allen Matkins firm, wrote to the city on Nov. 19 that the city is causing unnecessary delay and needless increases in the cost of the proposed project by imposing new requirements.
While such a proposal would normally violate city building codes, the city didn’t turn in its housing plan to the state on time. As a result, certain projects are allowed under the Builder’s Remedy provision of state law if they include a portion of subsidized housing.
The project cannot rely on the state law AB2011, an affordable housing law, to fast-track the process because the hotel does not count as housing, and it must undergo a full review under the California Environmental Quality Act, the city said in November.
Last summer, the National Park Service found that the former magazine headquarters is eligible for a historic listing, which could force a full CEQA review.
Important to know when voting for Palo Alto city council this fall that Candidate Vicki Veenker opposed Josh Becker’s SB457 legislative fix that would have prevented this 39-story project and a 17-story Mollie Stones. And, that candidate Yudy Deng is big supporter of the Builders Remedy law!
They both support unfettered development in Palo Alto !
Vote no on Veenker and Deng!
It would be nice of the developer to refer to the project as the Combs Towers, so we can all remember who allowed this to happen by not doing his job.
Ben, there are 5 people on council — and Sunset isn’t even in Drew’s district. But I get it. Blame the black guy. On brand for you Ben.
Not in Drew’s district? I remember when we had at large elections! Hmmm, and why do we even have district elections…The CA legislature dominated by the Democrat Party. Was kind of nice when the council has to answer to everyone, not just a district. Maybe they would be voting differently if it was the way it used to be.
Ben, what a “troll-like” comment!!!! 🙂
Why is that? The single and only reason that this project is going to go up is that city council refused to do their job and create a state approved housing plan on time. Combs and the city council simply did not do the job they were sworn to do.
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They illegally keep changing the reason for not letting it move forward. They’re digging the hole further to cover for their own negligence. I think naming the towers after Drew is probably the kindest response.
Doria Summa, thanks for the reminder about how Veenker and Deng support Builder’s Remedy atrocities. Shame on them.
Think there’s a coincidence between their support of projects like this and the hufge flood of outside money to Deng? We’ve seen this movie before where the no-limits-on growth candidates get most of the money, especially when they lack experience.
Compare the endorsements shown on the websites of Deng and Cheng.
California is already limited in its resources to take care of its current population. The massive housing projects will cause California cities to all start feeling and looking like New York City. Newsom and Bonta don’t care about the negative impacts re: the housing mandates. They are one size fits all rather than common sense ones that don’t destroy the character of neighborhoods. If the high skyscraper buildings were built next door or in the backyard of Newsom’s and Bonta’s homes, then they may change their minds.
Community members and local advocates should call for Governor Gavin Newsom and Attorney General Rob Bonta to visit Menlo Park and its adjacent cities and hold town hall meetings instead of issuing a state warning letter. Additional participants should include Oisin Heneghan, Vitaly Yusufov, Josh Becker, MP city council, Xavier Becerra, Steve Hilton, and other politicians. I encourage everyone to please contact local and state politicians by going to their websites. Speak up about this Sunset project and any other serious concerns. Newsom’s housing mandates and Prop. 19’s deceptive proposition in 2020 have caused gentrification more than anything else. New houses being built are too huge in size and expensive, and high skyscraper buildings will also be very expensive to own and rent. None of these issues solve the housing problems. New housing and businesses should be built in less densely populated and unused areas of California with common sense limitations. Santa Cruz and Redwood City worsened due to the massive building projects, overcrowding, and traffic. Other cities will soon be the same. Overpopulation and lack of sufficient essential resources are problems in the state, country, and world that more people don’t seem to want to discuss and try to fix.