California: Hillsdale Shopping Center eligible for streamlined approval

Historically, such a large project may have been subject to countless City Council and Planning Commission hearings but, like a lot of new state legislation over the last several years, Senate Bill 330 streamlines the process. It also guarantees certain fees and regulations at the time of application submission, aimed at spurring housing production. To qualify, applicants need to demonstrate, among other criteria, that the net new construction comprises at least 50% residential use.

Community Development Director Zach Dahl said the city wanted further clarification from HCD, since recent legislation expanded the definition of what constitutes a housing development under the law.

“We wanted to make sure we understand how these different provisions apply, to make sure we’re understanding this correctly,” Dahl said.

In a letter Aug. 12, the Department of Housing and Community Development affirmed Bohannon Properties’ stance, stating that because the net new square footage is 1.07 million square feet, with 569,000 square feet allocated as residential, the project meets the 50% or more threshold and “qualifies as a housing development project under the [Housing Accountability Act].”

“The project very clearly qualifies under SB 330,” David Bohannon, president of Bohannon Properties, said.

The qualification provides developers with more certainty, as they don’t have to worry about a jurisdiction increasing its fee schedule or changing its zoning regulations during the long entitlement and construction process. The legislation is one of many state laws over the last several years that limits cities’ abilities to delay or complicate housing approvals.

Even though cities have less ability to condition their approvals, Rick Bonilla, San Mateo resident and former mayor, said residents still have a say in how they want neighboring developments to look.

“The ‘squeaky wheel gets the grease’ still applies if enough residents get together and say we need reassurances,” Bonilla said. “[Bohannon] doesn’t want to poison that well.”

But for some residents, including Dana Sahae, the legislation is one of many that symbolizes the dwindling leverage residents and cities have when it comes to negotiating community benefits with developers.

“We are losing a voice in local planning, and that is concerning. Any local oversight or power to negotiate benefits to the city have been taken,” Sahae said. “How do we make sure the developer holds up their promises?”

While residents and the city have voiced a strong preference to keep an affordable grocery store on the site, such as the Trader Joe’s that currently operates on the property, it can’t be a condition of approval, nor can mandating enhanced bike lanes connecting to El Camino Real, or ensuring housing gets built around the same time as the commercial buildings.

“I think we all agree we need to build housing,” Sahae said. “I just want to make sure it’s built in this decade, and I’m slightly concerned that we will have an influx of commercial space and an influx of people coming into the city but actually no new housing, which goes against what everyone says they want to see in the city.”

Bohannon has affirmed the community’s desire to maintain a grocery store but can’t guarantee its presence and has also stated the timeline of development is highly dependent on market conditions.

Bonilla said a lack of important amenities will only hurt the development’s long-term financial viability.

“[The developers] have state law in their favor but people can say, ‘If you don’t have a grocery store, then why do I have to go there? I’ll choose to go somewhere else,’” he said. “At the end of the day, the developer knows they have to do a few things to make it a functioning retail center.”

The potentially 1,670 units proposed in the Hillsdale project would comprise nearly one-quarter of the units the city needs to approve between 2023-31 per state mandates.