Pacific Retirement Services is returning about $600,000 in deposits to families who signed up to live in the Mirabella retirement community proposed to be built on 11 acres of land adjacent to the Foster City Civic Center. The action, necessitated by economic uncertainty, could jeopardize the developer’s exclusive right to negotiate for the site with the city and open the land up for new development proposals.

“We’ve been working on it a year. The capital markets are still very frosty,” said Paul Riepma, vice president of marketing at PRS.

Still, PRS is hoping the financial hurdle will be met and development will move forward.

“The Foster City site has the walkability we are looking for and views, too,” Riepma said. “I predict we will have Mirabella there one day.”

The San Mateo-Foster City School District has expressed interest in building a fourth elementary school in the city on the site to accommodate 400 extra students by which the district projects to grow. The council has indicated previously, however, that the land is too valuable to be given to a school and should provide the city some extra property and sales tax revenue instead, since it is the last major piece of land the city owns.

The council has made it clear it wants the 15 acres to become a center for the city, with a mixed use of housing and retail that provides the city with the sense of having a downtown. The council decided building a community for its aging senior population was the best use for the land.

“The council believes in the Mirabella project as an appropriate use of the land. It boils down to the economic forces,” said Foster City Vice Mayor Linda Koelling.

Capital markets important to financing a continuing-care retirement community have not recovered sufficiently, according to a letter sent to depositors. Although some depositors do not want their money back just yet, PRS believes the best course of action is to give all the nearly 600 families their $1,000 back.

The developer’s exclusive right to negotiate expires April 1 and Riepma said he is not sure if PRS will negotiate to extend those rights.

Mirabella is planned to be approximately 500 units in a continuing care retirement community with 50,000 square feet of retail and a 1.3-acre public plaza on 11 acres of public property adjacent to the Civic Center. The proposal suggests buildings up to 12-stories high.

Those depositors who want to sign back up for the project if it does continue will have priority over all others.

“We believe in our hearts that we will build a Mirabella San Francisco Bay CCRC in the future. When the new plans are finalized, you will be contacted and if you remain interested, you will have an opportunity to rejoin the Priority Program Waiting List based on your original deposit date,” according to the letter sent to depositors by PRS.

“Any comment regarding the PRS decision to refund the deposits would be speculation on my part but I continue to remain hopeful that something fruitful develops between now and April 1,” said Councilman Art Kiesel.

Mirabella San Francisco Bay proposed to build apartment homes with up to 2,000 square feet of living space and large decks with views of the Foster City Lagoon and the East Bay. If completed, it proposes to offer world-class services, amenities, dining, health care and conveniences.

“As far as I am concerned, I am still a strong supporter of having an excellent senior living facility in Foster City and will continue to work diligently to make that happen, whether it happens as Mirabella or something else,” said Councilman Charlie Bronitsky.

Foster City anticipated earning about $1 million a year in taxes from the development.

“Losing the Mirabella project would be unfortunate, but certainly not catastrophic for Foster City as it is a well-managed city,” Bronitsky said.

Bill Silverfarb can be reached by e-mail: silverfarb@smdailyjournal.com or by phone: (650) 344-5200 ext. 106.