STATE OF CALIFORNIA FAIR POLITICAL PRACTICES COMMISSION 1102 Q Street• Suite 3000 • Sacramento, CA 95811 (916) 322-5660 • Fax (916) 322-0886

February 14, 2019

William L. McClure City Attorney Office of the City Attorney 1100 Alma Street Menlo Park, CA 94025

Re: Your Request for Advice Our File No. 1-18-.272

Dear Mr. McClure:

This letter responds to your request for advice regarding the conflict of interest provisions of the Political Reform Act (the "Act"). 1 Please note that we are only providing advice under the conflict of interest provisions of the Act and not under other general conflict of interest prohibitions such as common law conflict of interest or Section 1090. Also note that we are not a finder of fact when rendering advice (In re Oglesby (1975) 1 FPPC Ops. 71 ). Because your inquiry is general in nature and does not pertain to a specific governmental decision, we are treating it as one for informal assistance.2

QUESTION

Does the Act prohibit Councilmember Taylor from taking part in governmental decisions concerning applications by or a wholly owned subsidiary of Facebook for projects on property owned or leased by Facebook?

CONCLUSION

As explained below, Councilmember Taylor is potentially prohibited from taking part in such decisions if there is a foreseeable and material effect on her interest in her lease; interests in Belle Haven Action and UnaMesa as sources of income; or her personal finances.

1 The Political Reform Act is contained in Government Code Sections 81000 through 91014. All statutory references are to the Government Code, unless otherwise indicated. The regulations of the Fair Political Practices Commission are contained in Sections 18110 through 18997 of Title 2 ofthe California Code of Regulations. All regulatory references are to Title 2, Division 6 of the California Code of Regulations, unless otherwise indicated.

2 Informal assistance does not provide the requestor with the immunity provided by an opinion or formal written advice. (Section 83114; Regulation 18329( c)(3).) File No. I-18-272 Page No. 2

FACTS AS PRESENTED BY REQUESTER

You are the City Attorney for the City of Menlo Park seeking advice on behalf of Councilmember Cecilia Taylor regarding her position as a paid contractor for a non-profit to which the Chan-Zuckerburg Initiative is a donor.

Councilmember Taylor is a tenant in a single-family home located in the Belle Haven neighborhood in the City of Menlo Park adjacent to the Bayfront Area.3 Menlo Park is divided into 5 Council districts and Taylor represents District 1. Taylor's residence is located within. 500 feet of the Dumbarton Rail Corridor, but more than 500 feet from the nearest Facebook owned or leased property.4

Facebook engages in the development of social media applications for people to connect through mobile devices, personal computers, and other platforms. It enables users to share opinions, ideas, photos, videos, and other activities online. Its products include Facebook, , Messenger, WhatsApp, and . Facebook is headquartered in Menlo Park, California and employs approximately 25,110 people, of which approximately 14,000 are located in Menlo Park.

Facebook Owned Property

Face book itself or through a wholly owned subsidiary owns and has developed three campuses in the Bayfront Area of Menlo Park. The East Campus is a 56.9-acre site that contains nine buildings occupied by approximately 6,600 employees. The West Campus is an approximately 22-acre site that contains one building. The Expansion Campus is an approximately 58-acre site that contains three office buildings.5 For each of these three developments there are Development Agreements which include community benefit payments and guaranteed on-going revenue streams for the City of Menlo Park.

Additionally, Facebook owns property located at 1350 Willow Road in the Bayfront Area, which consists of approximately 59 acres. On July 6, 2017, Peninsula Innovation Partners, LLC, on behalf of Facebook, submitted a formal application to comprehensively redevelop the site. The proposed master plan project would include approximately 1,500 residential dwelling units, 1. 72 million square feet of office space, 126,500 square feet of retail space, a 200-room hotel and a 40,000 square foot cultural/visitors center. The public process begins with a City Council study session on the proposed project (anticipated to be scheduled in the first quarter of 2019), and then after the project moves through the planning process, City Council review of the application components, including a Conditional Development Permit and Development Agreement and an Environmental Impact Report. The City Council must make the final decision on the entitlements.

3 You supplemented the facts stating that her tenancy is for a term ending at the end of March 2019, and then automatically converts to a month to month tenancy.

4 We note that Councilmember Taylor participated in City Council discussions concerning the proposed tenant relocation assistance ordinance on February 12, 2019. The Commission does not provide advice regarding past conduct. (Regulation 18329(b)(8)(A).) Therefore, we do not analyze the proposed ordinance with respect to her leasehold in her residence.

5 The Expansion Campus has an approval for inclusion of a 200-room limited service hotel. File No. 1-18-272 Page No. 3

In total, Face book is the largest single landowner in the Bayfront Area of Menlo Park, owning 34.5 percent of the property. With respect to the entire City, Facebook owns about six percent of the total land area.

In addition to the property it owns, Facebook leases an additional 46.16 acres in the Bayfront Area, some of which may be under contract to purchase and some are under long-term ground leases allowing Facebook to redevelop the properties.

Chan-Zuckerburg Initiative

The Chan-Zuckerberg Initiative, founded by Priscilla Chan and in December 2015, is a philanthropic organization that brings together engineering, grant-making, impact investing, policy, and advocacy work. The Chan-Zuckerberg Initiative is a separate organization from Facebook, although it is reportedly funded by Facebook stock personally owned by Priscilla Chan and Mark Zuckerberg. The Initiative's areas of philanthropic focus include supporting science through basic biomedical research and education through personalized learning. The Initiative is also exploring other issues tied to the promotion of equal opportunity including access to affordable housing and criminal justice reform.

Launched in 2017, the Chan-Zuckerberg Initiative Community Fund is supporting organizations working in the communities of Belle Haven, East Palo Alto, North Fair Oaks, and Redwood City to address some of the most pressing needs identified by residents and local leaders. The Chan-Zuckerberg Initiative supports and partners with Belle Haven Action to promote visibility and awareness of local issues for the Belle Haven neighborhood in Menlo Park. Belle Haven Action advocates for equity and justice, acts as a local liaison for important community projects, initiates new programs for improved quality of life, and supports existing ones.

Councilmember Taylor's Source of Income

Councilmember Taylor is a paid independent contractor for Belle Haven Action receiving more than $500 per year. Belle Haven Action is a project of the UnaMesa Association ("UnaMesa"). UnaMesa is a 50l(c)(3) non-profit that strengthens communities by increasing the number and depth of meaningful connections. UnaMesa incubates projects that create and promote new ways of connecting within and across communities. Their overarching goal is to work with networks of social enterprises to develop shared frameworks for valuing interactions and relationships.

Exemplifying this spirit of community-based innovation, members of the Belle Haven neighborhood in Menlo Park came together to form Belle Haven Action6 working as an UnaMesa sponsored project7 to improve the health and well-being of their community. As the primary

6 According to its website, Belle Haven Action was established in the spring of 2017 by Cecilia Taylor to advocate for the residents of the Belle Haven Neighborhood in the City of Menlo Park. (www.beHehavenaction.org.)

7 You indicated in an email dated December 19, 2018, that Belle Haven Neighborhood Action is an unincorporated association that is not for profit and charitable in its purposes, and that because it is not incorporated and does not have an IRS 50l(c)(3) determination letter, it is operating under the auspices ofUnaMesa, which is a 50l(c)(3) organization. You further state it should be evaluated as part ofUnaMesa. File No. 1-18-272 Page No. 4 contractor for Belle Haven Action, Councilmember Taylor is paid by UnaMesa. The funding for Belle Haven Action is received through UnaMesa from a grant by the Chan-Zuckerberg Initiative, earmarked specifically for Belle Haven Action and its programs.

Dumbarton Rail Corridor

In February of 2016, SamTrans initiated the Dumbarton Transportation Corridor Study with the purpose of identifying improvements to enhance mobility in the Dumbarton Corridor between Alameda, San Mateo, and Santa Clara counties. Working collaboratively with project partners, including Facebook, the San Mateo County Transportation Authority, Alameda County Transportation Commission, and AC Transit, the study evaluated a variety of transportation . alternatives on the Dumbarton Bridge (Highway 84) and its approaches, as well as examined how to rehabilitate and repurpose the Dumbarton rail bridge for transit purposes.

In general, the study recommends a multimodal approach with both operational and infrastructure improvements on Highway 84 and the Dumbarton rail bridge that will be phased over time. An initial draft of the Study was presented to the SamTrans Board of Directors in August 2017 and was followed by an extensive stakeholder and public outreach process throughout August and September 2017. Comments and questions received during the outreach process were documented, answered, and incorporated into the Final Dumbarton Transportation Corridor Study. Recommendations included in the Final Dumbarton Transportation Corridor Study are consistent with the draft report, with the exception of one change: the potential bicycle/pedestrian multi-use path in the Dumbarton rail right-of-way from Redwood City to East Palo Alto, which was not previously recommended due to right-of-way constraints, will not be eliminated at this phase of study.

The City Council participated in the above described process, reviewing the study and other materials and providing comments and feedback. It is anticipated the City Council will continue to participate in this manner moving forward. In addition, the City of Menlo Park imposed requirements related to either performing improvement work or funding studies on project applicants in the Bayfront Area. For example, as part of the development agreements with Facebook, Facebook spent over Two Million Dollars ($2,000,000) toward funding the Dumbarton Corridor Study and implementation of recommendations.

ANALYSIS

Under Section 87100, a public official may not make, participate in making, or use his or her official position to influence a governmental decision in which the official has a financial interest. A public official has a "financial interest" in a governmental decision, within the meaning of the Act, if it is reasonably foreseeable that the decision will have a material financial effect on one or more of the public official's interests. (Section 87103; Regulation 18700(a).) File No. 1-18-272 Page No. 5

Section 87103 identifies interests from which a conflict of interest may arise and includes:

• Any business entity in which the public official has a direct or indirect investment worth $2,000 or more. (Section 87103(a).)

• Any real property in which the public official has a direct or indirect interest worth $2,000 or more. (Section 87103(b).)

• Any source of income, except gifts or loans by a commercial lending institution made in the regular course of business on terms available to the public without regard to official · status, aggregating $500 or more in value provided or promised to, received by, the public official within 12 months prior to the time when the decision is made. (Section 87103(c).)

• Any business entity in which the public official is a director, officer, partner, trustee, employee, or holds any position of management. (Section 87103(d).)

• Any donor of, or any intermediary or agent for a donor of, a gift or gifts aggregating $500 or more in value provided to, received by, or promised to the public official within 12 months prior to the time when the decision is made. (Section 87103(e).)

• In addition, a public official's personal finances are deemed to be directly involved in a governmental decision that will have any financial effect on his or her personal finances or those of his or her immediate family. (Section 87103.)

Here, Councilmember Taylor currently has a real property leasehold interest in her residence that will terminate at the end of March 2019 and convert automatically to a month to month tenancy.

Further, although Councilmember Taylor receives more than $500 per year as a paid independent contractor for Belle Haven Action, you stated that her income is more appropriately evaluated as coming from UnaMesa, a 501(c)(3) organization, because Belle Haven Action, which is not incorporated and is charitable in its purpose, operates under the auspices of UnaMesa. Therefore, she would have an interest in Belle Haven Action and UnaMesa as a source of income. 8

Accordingly, Councilmember Taylor has an identifiable interest in her lease, as an interest in real property, sources of income interests in Belle Haven Action and UnaMesa, and an interest in her personal finances that must be considered.

8 Note that under certain circumstances, the Commission has previously advised that a donor to a non-profit employer could be the source of gifts or income to the official employed by the non-profit. (See Shaw Advice Letter, No. A-87-045 [piercing was appropriate where donations to a non-profit constituted a significant portion of salary of the president of the non-profit].) Here, it appears the Chan-Zuckerberg Initiative and Mark Zuckerberg and Priscilla Chan could potentially be sources of income to Councilmember Taylor, but we do not have the facts to make such a determination for this informal advice. We recommend that you seek advice on this issue when a decision that may affect these potential financial interests is before the City. File No. 1-18-272 Page No. 6

Foreseeability and Materiality

At the outset, any determination of a conflict of interest is dependent upon the facts involved in each decision. Because there are no specific decisions before the City concerning applications for property that is owned or leased by Facebook, or the Dumbarton Rail Corridor, we have provided general legal standards relevant to the analysis below. We recommend you contact our office for additional advice with respect to a particular decision on such applications before the City.

The standard for foreseeability varies depending on whether an interest is explicitly involved in the decision.9 For a financial interest that is not explicitly involved in a decision at issue, the financial effect of the decision on an official's interest is reasonably foreseeable if it can be recognized as a realistic possibility and more than hypothetical or theoretical. (Regulation 18701(b).) Councilmember Taylor's interests are not explicitly involved in the decisions at issue.

Development Applications for Property Owned/Leased by Face book

Belle Haven Action/UnaMesa

Regulation 18702.3(a)(3) provides a decision has a material effect where "the source is a nonprofit that will receive a measurable financial benefit or loss." Therefore, Councilmember Taylor will have a disqualifying conflict of interest under the Act with respect to a decision on an application by Facebook for a project on property owned or leased by Face book if there is a realistic possibility that Belle Haven Action/UnaMesa will receive a measurable financial benefit.

Leasehold Interest/Personal Finances

With respect to leasehold interests, Regulation 18702.2(c) states that the reasonably foreseeable financial effect of a governmental decision is material only when the decision will: 1) change the termination date of the lease; 2) increase or decrease the potential rental value of the property; 3) change the official's actual or legally allowable use of the property; or 4) impact the official's use and enjoyment of the property. (Regulation 18702.2(c )(1 )-( 4).) 10

Also, once Councilmember Taylor's tenancy converts to month to month, she will no longer have a leasehold interest in the property for purposes of the Act. (See Regulation 18233.) However, she may be disqualified from a decision affecting her month-to-month lease based upon the decision's effect on her personal finances. Under Regulation 18702.5, a foreseeable effect on an official's personal finances is material if

9 An official's financial interest is explicitly involved in a governmental decision if the interest is a named party in, or subject of, the decision. A financial interest is the subject of a proceeding if the decision involves the issuance, renewal, approval, denial, or revocation of any license, permit, or other entitlement to, or contract with, the financial interest, or if the decision affects a real property interest described in Regulation l 8702.2(a)(l)-(6). (Regulation 1870l(a).)

10 This standard would likewise apply to the analysis of her leasehold interest for any future decision on the Dumbarton Rail Corridor. File No. I-18-272 Page No. 7 the official or the official's immediate family member will receive a measurable financial benefit or loss.

If you have other questions on this matter, please contact me at (916) 322-5660.

Sincerely,

Dave Bainbridge General Counsel

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