The San Mateo Planning Commission determined last night that Michaels Arts and Craft store cannot move into the former Borders bookstore site on El Camino Real.
Michaels Arts and Craft store’s quest to move to the former Borders bookstore site on El Camino Real does not fit in with San Mateo’s transit-oriented-development plan, the San Mateo Planning Commission determined last night.
The commission also ruled that the retail use for the property on 2925 S. El Camino Real has also been lost since a retail use was discontinued for six months between November 2011 and May 2012.
The site currently is home to the Spirit Halloween store, which was granted a business tax certificate to operate there now while the city considered an appeal from property owner 1998 Books Holdings LLC.
The company may now appeal the decision, however, to the City Council.
Commissioners made it clear though that they do not want Michaels to leave the city.
Its lease at 1750 Delaware St. will be terminated at the end of 2014 as the property, that also is home to Kmart, will be transformed in the next decade into a mixed-used transit-oriented-development called Station Park Green.
“We don’t want Michaels to leave San Mateo and I don’t want to see a vacant store for 15 years. I hope the property owner can bring back a new application that fits with the corridor plan,” said Dianne Whitaker, the commission’s chair.
The Borders, across from the Hillsdale Shopping Center, closed in 2011.
Michaels plan to occupy the site with 25,000 square feet of retail does not fit in with the city’s future vision for the area near the Caltrain station as it is not neighborhood serving, city staff determined.
Lawyers for the property owner, however, said they had differing views than city staff over the term “occupancy.” Staff determined since the site was not open to retail sales for the six months that its legal non-conforming use had been lost despite the property owner’s contention that the site was occupied and being prepared for retail sales during that span.
“Staff equates ‘use’ and ‘occupancy’ as meaning ‘open for business’ but it doesn’t say that anywhere in the code,” said attorney Linda Bernhardt, who represents the property owner.
1998 Books Holdings LLC actually filed a lawsuit against the city challenging its zoning rules but dropped it leading up to last night’s decision.
The city had objected to the company’s lawsuit because it had not appealed administratively a decision by city staff to deny issuance of a business tax certificate.
The company may now appeal to the City Council to try and get the decision overturned.
The city changed its zoning rules regarding the area around the Hillsdale Caltrain station in May 2011, when an ordinance passed that put the property into the city’s Rail Corridor Transit-Oriented Development Plan.
The current Michaels store is approximately 30,000 square feet as is the Borders site, which has been subleased in recent years by the Spirit Halloween Store for a few months a year.
Michaels needs at least 21,000 square feet of space to be profitable and wants to stay in the neighborhood, said attorneys with DLA Piper, LLP, which represented 1998 Books Holdings LLC during its appeal of the city’s zoning rules last night.
A few of the store’s loyal customers made a case for Michaels’ move last night by saying it was neighborhood serving. Company officials said the average customer spends just $20 a visit and carries out only small bags of goods.
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