New proposal for Firehouse Square

“When I first found out about this I almost jumped out of my chair with excitement,” said Councilwoman Julia Mates, according to a video of the meeting. “It would be a huge game changer, it’s a really big deal.”

That excitement was shared by Mates’ colleagues, though for some of them, cautious optimism might be a more accurate description, especially given the history. When councilmembers extended the negotiating process in March for the fourth time since 2013, they made it clear it was for the last time, but that was before this latest proposal.

“On the topic of extending time, the only reason why I’m entertaining this is because of this new exciting partnership, there’s great promise in it and increasing affordability dramatically is what our community needs,” said Vice Mayor Davina Hurt. “I will say the devil is in the details, and it’s still not clear exactly how everything pans out.”

Many of those details will be hammered out over the next 90 days, during which time MidPen will assess the feasibility of the project, get up to speed with its background and explore potential subsidies.

The mixed-use development will bring 4,000 square feet of commercial space at the corner of El Camino and O’Neill and up to 81 units, including 15 market-rate townhomes to be built by Sares Regis and 66 below-market-rate units — described as “flats” — to be developed by MidPen. City Manager Greg Scoles said those affordable units will most likely be rentals.

Hurt called for affordable units “across the board” for families in addition to studios and one-bedrooms, a request echoed by Councilman Charles Stone.

Sares Regis proposed the partnership with MidPen after it determined its previous proposal would not pencil out.

“We think there’s obviously huge benefits here, first off having the two developers work side-by-side doing what we do best: Sares Regis doing a market-rate development, and MidPen with their history needs no introduction,” said Jeff Smith, Sares Regis’ senior vice president of residential development.

Felix AuYeung, MidPen’s director of business development, said his company was able to access tax credits because MidPen’s development is 100 percent affordable, and the property will be restricted to somewhere between 30 and 80 percent of area median income, with an average affordability of less than 60 percent AMI.

The affordable units are expected to require a subsidy from the city, though exact numbers are yet to be determined, according to a staff report. The developer will also pay prevailing wages.

Beyond the increase in affordability, Mayor Doug Kim specifically wanted to make sure the project as it has been negotiated would otherwise remain, and it appears he’ll get his wish.

“It’s my understanding the look and feel of the project would be the same,” said Scoles.

The exclusive negotiating agreement will expire on Oct. 31 of this year.

zachary@smdailyjournal.com

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