The developer who wants to build a skyscraper at the former Sunset Headquarters is threatening to sue the city if it doesn’t approve the project in the next three months, the San Francisco Chronicle reports today (Aug. 3).
Developer Oisin Heneghan is leaning on a warning letter sent by Attorney General Rob Bonta last month saying the city improperly changed its reasons for rejecting his company’s proposal for 665 apartments, a hotel, office space and a preschool across three towers with the tallest going up to 461 feet at 80 Willow Road.
The city has changed its reasons for rejecting the request from Heneghan and his company N17 to streamline approval of the project at 80 Willow Road, according to the Chronicle.
Now, because the city has gotten a warning from Bonta, Heneghan is citing a new state law that could force a decision on the project, according to documents reviewed by the Chronicle. The Post has asked the city for the same materials.
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.”
The city’s website does not mention the developer’s threat to sue.
This is the latest twist in the two year battle between Heneghan’s company N17, the city and the project’s supporters and detractors.
This is just the latest lawsuit threat for the project. In December, YIMBY Law, a pro-housing group, sent a letter to the city threatening to sue over the city changing the requirements for the project.
Heneghan and his associates have been trading letters with the city, in May the city told the developer that its application cannot be processed.
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.
The city has been waiting since May 14, 2025, for developer N17 to pay $799,951 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 that were not previously made.
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.
The property is owned by Russian businessman Vitaly Yusufov.
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!