With an early payment worth nearly $3 million, Millbrae officials kick-started development of an affordable housing development with a preference for military veterans which will be built near the city’s train station.

The Millbrae City Council unanimously voted Tuesday, Jan. 12, to approve a $2.88 million loan to The Core Companies, which is planning 80 affordable units in the Gateway to Millbrae Station development on a BART parking lot.

The loan comes in a different format than the $2.8 million contribution officials previously approved in the development agreement, but the builder said a modified allocation will bring the affordable units to fruition sooner than initially anticipated.

With the loan’s approval designed to facilitate construction, The Core Companies representative Chris Neale said groundbreaking could begin nearly immediately, which would put it on track for completion next spring.

Such a timeline significantly accelerates the development, since initial projections called for the project to be finished in the last leg of construction — but the amendment would allow it to be built first.

Vice Mayor Anne Oliva celebrated the change in plans as a means of bringing a needed resource to the community sooner than expected.

“Millbrae will have affordable housing in the middle of a pandemic before anything else. I love it,” she said.

Not everyone was so enthusiastic, as Councilwoman Gina Papan questioned the need for the change in plans.

“We are in the middle of COVID and we are asked to modify an existing agreement and give up millions of dollars,” said Papan, who has long been critical of the deal with developer Republic Urban to build the project on BART land.

To address those concerns, Papan’s colleagues acknowledged that the money has already been committed as a grant to help finance the project. The conversion from a grant to a loan was required to accommodate lender preferences, said Neale, and the timing is necessary to set off a chain reaction of other contributions from local, state and private partners.

Formatting the city’s contribution as a low-interest loan could accrue interest over the construction term, and Councilman Anders Fung questioned whether Millbrae could be in a position to recoup some of its investment.

But City Attorney Michael Conneran noted many other parties may have some stake in the financing, while adding that ultimately the contribution will go toward construction of affordable housing, which is a public amenity rather than a profitable venture.

Republic Urban executive Michael Van Every lauded the deal as a means to speeding up delivery of a unique project.

“This is absolutely a win for the citizens of Millbrae,” he said.

In all, Van Every’s company is constructing four buildings that are four to seven stories tall at the BART site. One residential building features 300 market-rate units and 20 units affordable to moderate-income people, plus 13,749 square feet of ground floor retail.

The other residential building consists of the 80 affordable units reserved for veterans, which will be built by The Core Companies. Another building has 151,583 square feet of offices and 22,534 square feet of ground floor retail and a hotel offers 164 rooms.

To assure the company keeps its promises regarding the accelerated development, Councilman Reuben Holober suggested formalizing an agreement specifying when the affordable units would be available.

Officials ultimately adopted the agreement, which Mayor Ann Schneider celebrated.

“I think this is exciting,” she said.

In other business, councilmembers unanimously agreed to overrule a previous decision by the San Francisco International Airport disallowing development of biotech commercial space in the new office buildings near the train station. Holober recused himself from the vote due to potential conflict of interest in his consulting work.

Because biotechnology businesses work regularly with hazardous materials, airport officials claimed their presence in the flight path of a popular airport could amplify the danger facing residents in case of a plane crash.

“We strongly support economic growth in our region, but not at the detriment of our neighbors,” said Nupur Sinha, the airport’s acting planning and environmental director.

But city officials favored allowing biosafety level 2 companies — or those dealing with maladies such as hepatitis, HIV, E. coli and staph infection — in the commercial developments to attract life sciences companies to Millbrae.

Disregarding concerns that the presence of those companies would add any potential threat to the community, Papan led her colleagues in allowing their occupancy.

“I don’t think this is any increased risk,” said Papan.

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