California Attorney General Rob Bonta has told Menlo Park that it repeatedly broke state housing law to stall the 665-unit Willow Park project at the old Sunset Magazine headquarters — including by billing the developer more than $300,000 in legal fees to review an application the city was trying to kill.

Bonta's 10-page notice, dated July 29, stops short of ordering the 458-foot mixed-use project forward, but it systematically dismantles Menlo Park's legal grounds for blocking it — and it hands developer N17 the ammunition to sue. In one of the Peninsula's most closely watched development fights, the document is a window into how a city can slow a large housing project for years without ever formally saying no, and into the state's growing willingness to call that stalling illegal.

First reported by the San Francisco Chronicle on Aug. 3, the notice told Menlo Park it "has not handled the application in accordance with the Affordable Housing and High Road Jobs Act of 2022," the law known as AB 2011 that lets qualifying housing projects skip discretionary review. The Almanac, which obtained the notice through a Public Records Act request and from the developer, reported its contents in detail.

At issue is Willow Park, a mixed-use complex that developer N17 has pursued since 2023 on the former Sunset Magazine campus at 80 Willow Road in the Linfield Oaks neighborhood. The plan calls for 665 homes — 100 of them affordable — plus retail, offices, a hotel, a sports club, a preschool and a public plaza, with a tallest tower that could reach 458 feet, according to city figures. Residents and city leaders have fought it as wildly out of scale for the area.

Bonta's notice lays out how, in the state's view, the city crossed from opposition into illegality. According to The Almanac, the notice says N17 submitted a revised application to address Menlo Park's initial determination that the project was inconsistent with AB 2011's standards — but the city then cited additional inconsistencies, which the notice says AB 2011 prohibits because a city cannot make new findings it did not identify previously. The state also faulted Menlo Park for denying the project protections under "builder's remedy," a Housing Accountability Act provision that lets developers bypass local land-use rules when a city lacks a state-certified housing plan. Menlo Park had not gained that certification when N17 first applied.

The detail that stands out is financial. Bonta alleged the city violated the Housing Accountability Act by making the developer pay for the city's own legal costs to review the project. "To date, Menlo Park has billed the applicant $302,938 for legal fees alone," N17 said in a news release — money the developer spent underwriting the city's resistance to its own application.

N17 founder Oisín Heneghan welcomed the notice. "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," he said in the release. "The state has now rejected every remaining legal basis the city asserted for denying streamlined approval." In an email to The Almanac, he added: "We are actively working with the city on finalizing the project approvals."

Crucially, Bonta did not order the project approved — he admonished the city and left it there. So N17 is not waiting. Through attorney David Blackwell, the developer notified Menlo Park in an Aug. 3 letter of its intent to sue to force the project forward. "The city's unlawful actions are summarized in" Bonta's notice, Blackwell wrote, according to The Almanac.

Menlo Park, for its part, is noncommittal. "The city is evaluating the opinions expressed in the AG notice," it said in a statement, adding that it "will continue to evaluate the application and the AG's notice."

That gap — between a strongly worded state notice and any binding consequence — is the real test here. Bonta has flagged the conduct as unlawful, but enforcement still runs through the courts, and it is the developer, not the state, that has moved to litigate. Whether a letter from Sacramento is enough to unstick a project a city has resisted since 2023, or whether it takes a judge, is the question Willow Park is about to answer.