Real estate developers have expressed interest in the city-owned Talbot’s Toyland parking lot site in downtown San Mateo, which could be part of a larger redevelopment site for housing if paired with the surrounding adjacent property on the block.
Mayor Eric Rodriguez said Prometheus Real Estate Group in San Mateo had expressed initial interest to the city in the Talbot’s parking lot site, which is at Fourth and Railroad avenues and has 57 parking spaces. The vacant Talbot’s Toyland, next to the city-owned parking lot, closed in 2019 after 66 years. The property adjacent from the parking lot, which includes Talbot’s Toyland, is privately owned. If a developer bought or was interested in the city-owned land, it would likely have to acquire other adjacent property to redevelop the block. Representatives from Prometheus did not respond to requests for comments.
Assistant City Manager Kathy Kleinbaum said separate developers had expressed interest in the Ravioli House lot between Fifth and Sixth avenues and Talbot’s parking lot, respectively. San Mateo owns both parking sites. The interest in Talbot’s parking lot was more serious than the Ravioli House lot interest. Some initial interest in the development had also been for commercial development, she said.
Kleinbaum stressed any interest and redevelopment of the parking lots is at the preliminary stage, and it would likely be 2023 before any construction started if an agreement with the city is reached.
The San Mateo City Council has expressed an interest in a long-term ground lease, which allows it to own the land and lease it out, an agreement for 50 years on average. It is similar to a sale but allows the city to retain ownership.
At its recent City Council meeting, the city declared both parking lot properties as surplus land, paving the way for more interest and offers from businesses and companies interested in redeveloping them. Before a city or local agency can sell or lease property, it must declare the property surplus land or exempt surplus land. The city would then issue a notice about the property, and interested parties have 60 days to respond with a notice of interest, which would be March 8 for these properties.
The city is then required to negotiate with interested groups for 90 days, although it would not be required to sell the property. If the development became housing developments, the property would have to include 15% of its units at below market rates to meet the city’s inclusionary housing program. The city first began exploring development opportunities at a Nov. 16 study session, and the properties are unlikely to be developed together.
Rodriguez said it was important for the public to realize there is no proposal right now on the table to lease or buy the two properties. The city is in the initial stages of gauging interest.
“I see this as the first step to open the door to see what the potential is,” Rodriguez said.
Members of the City Council at its Jan. 4 meeting expressed a preference for the redeveloped site to have affordable housing, whether it is just housing development or mixed-use development.
Councilman Joe Goethals called the chance to explore developers’ interest in the parking lots a vital opportunity.
“I think that this is another great opportunity to explore right now to see how much affordable housing that we can get there, Goethals said.
Councilwoman Amourence Lee said she wants to see development come in with replacement parking, affordable housing and mixed-use development.
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