A 44-acre commercial campus in South City’s Oyster Point is moving along, with core construction on the second phase completed earlier this year and approval secured for raising additional tax revenue.
Kilroy Realty owns the site, situated north of the Genentech campus, which it plans to fully develop into a commercial area, primarily for life science and research and development purposes. The firm sought swift improvement projects and initiated what’s known as a community facilities district, or a designated area that agrees to pay a special form of tax on their properties in exchange for the construction of certain projects or services in that district.
During a council meeting May 28, the City Council approved the next series of special tax bonds up to $32 million.
“It will be a 10-building campus when it’s all built out, on approximately 50 acres, located at the end of Oyster Point Boulevard,” Mike Grisso, senior vice president at Kilroy Realty, said. “When it’s built out it will be a total of about 3.5 million square feet.”
The first phase, completed in 2021, has been successful, Grisso said, with three buildings — totaling 660,00 square feet — fully leased by Stripe and Cytokinetics as tenants.
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In the second phase, another three buildings — including a parking garage and conference center — will be constructed, complete with open space and an amphitheater. Core and shell construction was completed earlier this year.
The biotech hub is well positioned to take advantage of such financing mechanisms, as they essentially would be the sole beneficiaries of the revenue generated from the tax-exempt bond.
While the Oyster Point CFD is the only one of its kind in the city, another initiative to create a CFD on the eastern side of Highway 101, the Eastern Neighborhood Facilities District, is underway, with property owners expected to vote on the special tax in early 2026. The cost estimate for all of the area’s transportation infrastructure projects, as outlined in the city’s general plan, ranges from $150 million to $180 million. That greatly exceeds the $32 million in impact fees the city has collected for transportation services — one of the key funding mechanisms for such projects — and those must also be used for projects throughout the entire city.
“It’s very impressive,” Mayor Eddie Flores said of developments in the Oyster Point CFD. “I think it will be a great addition in that corridor.”
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