Silicon Valley congressman alleges major project is tied to Russian oligarch

A Silicon Valley congressman is calling for a federal investigation into a controversial Menlo Park development, saying a Russian oligarch with alleged ties to organized crime is behind the project.

Read more ‘New reality’: California scientists uncover why rivers are turning orange

U.S. Rep Sam Liccardo, a Democrat whose district covers the city, asserted in a letter Wednesday to Department of the Treasury Secretary Scott Bessent that the development’s land is owned by Vitaly Yusufov, a Russian whom Liccardo says has been sanctioned by Ukraine and has acted on behalf of former Russian President Dmitry Medvedev. He said the project’s location near tech companies raises national security concerns.

Oisin Heneghan, the founder of N17 Development, the San Francisco-based developer behind the project, said in an email to SFGATE Friday that Liccardo’s allegations are “based on false reporting and what can only be described as NIMBY fan fiction.”

“Predictably, the same voices that have spent decades fighting new housing are fighting this too,” Heneghan said. “Just as the project is being approved, the NIMBY lobby is creating more and more sensational, desperate narratives to try to block these new homes.”

Heneghan did not comment on whether Yusufov owns the land, or Liccardo’s allegations that Yusufov has “ties to … individuals linked to organized crime.”

N17, the real estate developer, first proposed the project in 2023 but was immediately met with pushback from city residents and officials who said the apartment complex’s proposed three towers, with hundreds of housing units, a hotel and office space, did not match the character of the city.

The proposed building is located on the former headquarters of Sunset Magazine, built in 1951. The project’s opponents have argued the building should be protected as a historic site.

Liccardo said in a statement Thursday that he supports more housing in Menlo Park, which is still trying to meet state housing requirements for the city to build about 3,000 new homes between 2023 and 2031, but expressed concern about the development’s ownership. 

Read more Teoscar Hernández, Andy Pages hit home runs, Skubal strikes out 10 as Dodgers beat Giants 2-0

“I want more housing in our community, but Russian oligarchs with ties to the Kremlin and criminal networks should not control assets in our country,” he said in the statement. 

Liccardo’s letter to Bessent described the project as being “in the heart of Silicon Valley” and called for federal review given its proximity to a “very high concentration of defense tech, artificial intelligence, and quantum computing companies and research centers in the region.” 

Deutsche Bank sold its stake in the project in 2019 to a company it believed was owned by Yusufov, which set off alarms at the bank for potential suspicious activity, according to reporting by the New York Times.

Despite concerns from the community, California Attorney General Rob Bonta sided with the developer in July, pushing back on city officials by citing concerns with the way Menlo Park has handled the development in an effort to drop the project. Bonta said the city violated state law by improperly denying the developer and wrongly imposing fees. Bonta did not require the project to move forward, but the letter was a rejection of the city’s attempt to punt the project. 

Bonta’s office said Friday that it cannot comment on Licardo’s letter or say if it had its own investigation into the alleged ties to Russia.