By Matt Drange, The Bay Citizen

Facebook’s move to Menlo Park late last year has created a small windfall for one of the richest communities on the Peninsula.

Facebook's new headquarters are pictured in Menlo Park on Tuesday, Aug. 2, 2011 (Noah Berger/The Bay Citizen)

The town of Atherton, a wealthy enclave near the new Facebook campus, received $350,000 from the social media giant last month to allay its concerns over increased traffic.

Now the question for the town of 7,000 people is what to do with the cash.

“We’re not in a big hurry to spend the money,” said Atherton Mayor Bill Widmer. “We have a number of issues we’re looking at.”

The payment is the smallest Facebook has made to appease its new hometown and neighboring communities.

East Palo Alto, one of the poorest cities in the region, received $650,000 from Facebook to compensate for increased congestion on its streets. Menlo Park, meanwhile, received $1.1 million to finance street improvements and other projects to handle the thousands of employees working at the new location.

Facebook also will pay Menlo Park at least $8.5 million over the next 10 years to offset the loss of local sales taxes formerly generated by Sun Microsystems, the computer software company that used to occupy the space Facebook now calls home. Menlo Park does not levy a sales tax on online advertisements, a major source of revenue for Facebook.

Facebook, which moved from its Palo Alto location last year, employs roughly 2,500 people in Menlo Park. In coming years, it hopes to have 9,400 employees at the new site and a planned campus nearby. The company expects to break ground on the new facility next year and complete it by 2015.

After Atherton initially opposed Facebook’s move, the two reached an agreement in early July; the deal prohibits the town from filing a lawsuit against the company over the project.

Atherton, tucked between Menlo Park and Redwood City, is known for its tree-lined streets and secluded mansions. Per-capita income is $107,000 a year, according to the latest Census data, nearly four times the state average. There are few sidewalks or bicycle lanes, giving the city a more rural vibe than its Silicon Valley neighbors to the south.

The town’s annual budget is a little more than $10 million, with more than half going to public safety, Widmer said. Among the services the city provides are vacation home checks by police officers.

The idea behind the one-time payment was to compensate the town for increased traffic at the intersection of Marsh and Middlefield roads, about 5 miles from Facebook’s new campus.

The T-shaped intersection, which has one lane in each direction, is likely to become a main thoroughfare for cars traveling to Facebook. One possible solution is to remove a roadside drainage channel and add an extra turn lane.

In addition to the one-time payment of $350,000, Facebook agreed to provide Atherton up to $15,000 of consulting work for transportation initiatives, including improvements to bicycle lanes around the town. Last month, Atherton took the first step in developing a bicycle-pedestrian master plan.

So far, the $350,000 remains untouched in the town’s general fund.

“There are no restrictions as to how it can be spent,” said Widmer, who was quick to add that it is up to the Atherton City Council to decide how to allocate the money. “The intention was that we would more or less earmark that money so it’s used for traffic-related activity.”

This story was produced by The Bay Citizen, a project of the Center for Investigative Reporting. Learn more at

Atherton Gets Cash From Facebook 8 November,2012KQED News Staff

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