As One Peninsula City Reinvents Its Downtown, Another Wants To Keep Its Small-Town Vibe
Want to get a jump-start on upcoming deals? Meet the major San Francisco players at one of our upcoming events!
With over 1,800 housing units in the pipeline, South San Francisco is quickly adding more housing and re-creating its downtown corridor to provide a more transit-oriented environment. Up and down the San Francisco Peninsula, cities are adding more transit-oriented housing to catch up with ongoing demand for housing in San Mateo County.
But not all Peninsula cities have been pushing for more housing to keep up with demand. In Brisbane, a large-scale redevelopment along the shoreline that could bring over 2,000 units of housing and 4M SF of office continues to face city and community opposition. The state of multifamily in San Mateo County as well as the growth of office and mixed-use will be topics discussed during Bisnow’s Evolution of the San Francisco Peninsula! event July 11.
“I think those cities that are not doing their fair share for residential are not helping residents to thrive,” Sares Regis Group of Northern California Senior Vice President Ken Busch said.
Sares Regis is working on a 260-unit complex in South San Francisco.
South San Francisco has invested heavily in bringing people and businesses together in the same area, which helps mitigate traffic, said Busch, who will be speaking at the upcoming event.
“Those are some of the things that go a long way to raise people’s quality of life,” Busch said.
South San Francisco has been re-creating its downtown and invested nearly $60M to move the Caltrain station to downtown to provide more transit there, Busch said.
The relocation of the South San Francisco Caltrain station to downtown also has helped attract more development.
“South San Francisco fixed transit to something more accessible and provided a framework to take and utilize that transit,” Busch said. “That is pretty progressive.”
The City That Wants More Jobs, Housing
South San Francisco has a regional housing allocation need — housing requirements set by the state — of just over 1,800 housing units, but with significant job growth expected in the coming years, the city will have plenty of demand.
Busch said South San Francisco has done well recruiting biotech into the Oyster Point area and a number of city officials go to Boston each year for a biotech conference.
Bella Vista Development principal Sam Greason said the main driver for multifamily development in South San Francisco is the nearby jobs. The Oyster Point biotech/life science hub employs 20,000 workers with another 18,000 workers in the pipeline from projects approved or in the works. Genentech recently said it would double its workforce from 15,000 to 30,000 employees in South San Francisco, he said.
Another 3,500 jobs will be created with a Lane Partners project near San Bruno, Greason said. Lane Partners has plans to build a 1.5M SF office/R&D project in the city. Taken together, that means over 35,000 jobs will be created in this area and create demand for over 24,000 new housing units.
Sares Regis is redeveloping a former auto dealer site into a 260-unit housing complex on Cypress Avenue named Cadence with general contractor Devcon. The TCA Architects-designed project won the city’s request for proposals and has faced little community opposition.
“When we started the RFP process, we liked South San Francisco, but as we got to know more about it, we become more excited about it,” Busch said.
One of the benefits of allowing for more development is it leads to the removal of poor-quality and often vacant buildings, he said. In addition to the site having an abandoned auto dealership, another building was a poorly maintained short-term rental building that sustained fire damage, Busch said.
“What is happening is cities get to eliminate that type of product,” he said.
There are still sizable industrial sites available near Caltrain and downtown that can be developed, and land prices are half of what they are in established markets like Redwood City or Menlo Park, Greason said.
Bella Vista Development brokered two projects in the downtown South San Francisco area and plans to develop a 1.63-acre site at 40 Airport Blvd. One of the projects it brokered will lead to about 100 units of housing at 200 Airport Blvd. near the new Caltrain station and a major national apartment developer is in the initial application phase.
The second project it brokered will lead to 400 units on a 4-acre site on South Linden Ave. The developer is expected to submit a pre-application toward the end of 2018, Greason said.
Bella Vista, which specializes in high-density, urban infill and transit-oriented sites, has proposed 283 units at 40 Airport Blvd. that is about a quarter mile from the Caltrain station. Amenities are expected to include a double-height fitness center, a café, bike storage, a pet spa and dog walk on the first floor, a third-floor courtyard with a synthetic turf lawn for group yoga and outdoor movies, and areas to cook, dine and sit. It also will have an eighth-floor Skydeck that will include a game terrace, a fire pit, cooking and dining areas and an entertainment area, Greason said.
Greason said the city has been proactive and helpful with its development plans. The city helped jump-start new development by approving the Downtown Station Area Specific Plan, which designated parcels close to Caltrain as high-density multifamily and streamlined the entitlement process, reducing uncertainty for developers, he said.
The city increased the allowable density in its downtown transit core to 180 units/acre with public benefits. Land values have increased to a point that they exceed industrial uses, making it economically feasible to redevelop, Greason said.
He said the city has been fair with developers. When the city added a new park and open space fee in 2016, it exempted projects that were already in the pipeline.
The city also is considering gradual ramp-up of new affordability requirements similar to how Oakland has slowly increased its affordable housing fees in the last few years so that the new requirement doesn’t kill projects in the pipeline.
The city doesn’t require developers to sign a prevailing wage agreement on market-rate projects, which would increase inflated construction costs by another 25%, Greason said.
He said South San Francisco may eventually face challenges related to escalating construction costs due to the ongoing labor shortage and a rise in building material costs, the reduction of land values due to the escalation of inclusionary affordable housing requirements and pushback from longtime residents concerned about traffic.
“One of the reasons we have focused on downtown for our three projects is that these [roughly] 800 units will provide Oyster Point workers the opportunity to walk to biotech shuttles at Caltrain or ride their bikes to work, taking hundreds of cars off the road,” Greason said.
Despite these challenges, South San Francisco has a lot of development already headed its way.
“I expect Downtown South San Francisco to thrive and flourish as more housing projects are built,” Greason said.
The City That Is Fine With The Way It Is
While South San Francisco pushes for more development, Brisbane, which has a population of 4,700, wants to keep things the same. In March, Brisbane city officials began work on a proposed general plan amendment to allow for the building of 1,800 to 2,200 housing units and 4M SF of commercial space. The decision over the project is expected to lead to a ballot measure giving residents the final say on whether construction of Universal Paragon’s Brisbane Baylands can move forward.
City council members remained reluctant about this decision, saying they felt unnecessarily pressured to build housing to solve the region’s housing crisis and many remain concerned about properly cleaning up the former landfill site.
Brisbane also does not have as high of an Regional Housing Needs Allocation requirement, with only 83 units required to meet its housing needs by 2023.
The development is becoming increasingly controversial and state legislation has been suggested to help push the site forward, which would be unpopular in Brisbane. Moving the process to the ballot is expected to preserve local control over the development.
Hear more about multifamily projects in South San Francisco, Brisbane and beyond during Bisnow’s Evolution of the San Francisco Peninsula! event July 11 in Burlingame.