Springline Is Full. Santa Cruz Avenue Isn't. Here's the Rule Behind the Gap.

Walk west from the Menlo Park Caltrain station on a Friday evening and you'll pass through two different downtowns in about four minutes.

The first one is Springline. Tables are full outside Clark's Oyster Bar. The patio at Causwells, which relocated its entire concept down from San Francisco's Marina district into a space twice the size of the original, has a wait. Alisios, the contemporary Mexican restaurant from Burma Food Group, only opened its doors on June 11 this year, and it was the last piece needed to fill out Springline's restaurant roster completely.

Keep walking another block onto Santa Cruz Avenue proper and the energy drops. You'll pass storefronts with paper taped over the glass. Some have been empty long enough that the "For Lease" signs have started to fade. One of them, at 870 Santa Cruz Ave, was fully renovated inside and still couldn't find a tenant for months.

If you've lived here and noticed this pattern without being able to explain it, there's a specific, findable reason. It isn't about which block has better foot traffic or which landlords charge more. It's a zoning rule written in 2012, and the Menlo Park City Council just voted to unwind a chunk of it.

The rule that built two different downtowns

In 2012, the city adopted the El Camino Real/Downtown Specific Plan, a document meant to protect Santa Cruz Avenue as a walkable, retail-first street. The idea wasn't unreasonable. Cities worry about downtowns turning into rows of banks and dry cleaners with no reason for anyone to walk in the door. So the plan restricted what could go on the ground floor along Santa Cruz Avenue's street frontage. Banks were banned outright. Animal clinics were banned outright. Salons, barbers, and fitness studios were pushed to upper floors, out of sight from the sidewalk.

Springline didn't grow up under those same constraints in practice. It was negotiated and built as its own large-scale mixed-use project, and when city officials talk about what's driven new business into Menlo Park lately, they point to Springline and to the Stanford-affiliated development along El Camino Real as the examples that worked, precisely because they weren't boxed into the same street-by-street restrictions governing the older storefronts a block away.

That's the split. One corner of downtown got to build a tenant mix the market actually wanted. The other has spent over a decade under a plan that, by the city's own admission, produced the opposite of what it was designed to do.

What thirteen years of that rule actually looked like

A resident-run vacancy tracker maintained by the group Reimagine Menlo Park counted 13 vacant retail locations on Santa Cruz Avenue as of mid-2025, plus three more on Chestnut Street and one at Crane and Doyle. Together that's roughly 17 percent of downtown's retail locations sitting empty. Eight of those thirteen weren't even being actively marketed for lease. Six had been vacant for at least four years.

The tracker also flagged the economics behind why: base lease rates on Santa Cruz Avenue run $4.00 to $4.50 per square foot per month, a rate that prices out a lot of the small, independent tenants a walkable downtown depends on, especially once you've also narrowed the list of businesses legally allowed to occupy the space.

Windy Hill Ventures, which owns and recently renovated the building at 870 Santa Cruz Ave, ran straight into this. The company spent money bringing the space up to a modern standard and still couldn't attract a tenant, because the businesses that wanted the space, and could afford it, weren't on the list of uses the 2012 plan allowed. Menlo Park native Tod Spieker, who runs Windy Hill, is the one who filed the application that led to June's vote.

What the city actually changed on June 23

The Menlo Park City Council approved a package of zoning amendments on June 23, 2026, and the change took effect immediately. Here's what's now different on Santa Cruz Avenue:

• Spas, salons, barbers, fitness studios, and non-surgical cosmetic services can now open on the ground floor without a conditional use permit. Previously they were confined to upper floors or barred entirely.
• Animal clinics, banks, and general business services can now apply for permits to operate on Santa Cruz Avenue. Under the old plan, none of these were allowed at all.
• Property owners can now convert the rear portion of oversized ground-floor retail spaces into office use, subject to Planning Commission approval and a community benefit fee, letting large storefronts shrink their retail footprint up front while putting the back of the building to work.

Not everything opened up. Massage parlors are still excluded from the downtown core. And banks, which already occupy roughly 28,000 square feet along Santa Cruz Avenue, are now capped at 30,000 square feet total citywide on that corridor, leaving only about 2,000 square feet of room for any new one to move in.

Councilmember Drew Combs put the underlying problem plainly at the June 23 meeting, saying the 2012 plan had been "almost a complete failure" when it came to actually revitalizing Santa Cruz Avenue and that the storefronts it produced had been "few and far between."

The furniture store that shows why this matters on the ground

The office-conversion piece of the new rule has a real, walkable example behind it. Luminaire, the furniture store operating out of Windy Hill's building, has said its current space is too large for the store to sustain on its own, but the store wants to stay downtown. Under the old rules, its only options were to either keep paying for square footage it didn't need or leave. Under the new rules, it can shrink its public-facing footprint and let the back of the building do something else, likely office space, while staying open on the block people actually walk past.

That's a small, specific illustration of what the rule change is actually trying to fix. It's not about attracting one flagship tenant. It's about giving existing businesses room to right-size instead of disappearing.

What to watch for if you walk this block regularly

As of this writing, the city hasn't announced specific new tenants moving into the addresses that have sat empty the longest. The permitting pathway just opened two months ago, and buildouts, permits, and lease negotiations for something like a fitness studio or a vet clinic don't happen overnight. If you're walking past 870 Santa Cruz Ave, or the long-vacant spaces further down the block, the honest answer right now is that the storefronts are still empty, but the legal reason they had to stay that way is gone.

What's worth paying attention to over the next several months is whether the type of tenant filling those spaces starts to look different from what Santa Cruz Avenue has traditionally offered. A yoga studio or a small bank branch wouldn't have been legally possible here a year ago. Now they are, and the city has already cleared the paperwork.

The bigger shift is what this says about downtown as a whole. Springline proved there's real demand for a denser, more varied mix of businesses in Menlo Park. The June vote is the first real attempt to let the older half of downtown compete on the same terms, rather than staying frozen under a plan built for a different retail era.

If you've been wondering why one end of your walk downtown feels alive and the other end feels like it's waiting for something, now you know what it's waiting for. It just got the paperwork it needed.

Caitlin Beanan keeps a close eye on shifts like this because the health of a neighborhood's commercial corridor tends to show up in home values long before it shows up in headlines. If you're curious how changes like this one might affect what your Menlo Park home is worth, reach out to Caitlin Beanan for a free home valuation.