San Carlos moves forward with eminent domain plan

Situated next to an affordable housing development owned and operated by the nonprofit HIP Housing, the building at 1232 Cherry St. that Vella and his wife have owned for more than 25 years has long been pegged as a site where more affordable units could be built through a joint venture between the nonprofit and the city, explained Community Development Director Al Savay at the City Council’s June 24 meeting.

A short walk from public transit and a variety of services, the two parcels, if combined into one larger parcel of about 11,000 square feet, could provide some 25 units on a downtown lot, according to financial analyses and project studies Savay said city officials and the nonprofit conducted. With the goal of acquiring the property and boosting the city’s housing stock near the city’s downtown and public transit, city officials have been negotiating with Vella since 2014 to acquire the property, Savay said previously.

Because HIP Housing’s affordable housing restrictive covenant is set to expire in 2020, city officials had hoped the parties could reach an agreement in the coming months. In May, it sent a formal government code offer to Vella based on the property’s appraised value, which was appraised in March and valued at $2.76 million, according to a staff report.

Vella said previously he was not initially interested in selling the property to anyone since he had been hoping income from the building could continue supporting his family as he and his wife help raise their grandchildren in the area. He acknowledged he changed his mind after downtown construction projects drove tenants out of the building, and said in June he would be happy to partner with the city to address its need for affordable housing but needed more time so he could hire a professional to help him through the process.

Rubens said the city faced several deadlines related to the building’s appraisal, housing funds that could be tapped for an affordable development project and HIP Housing’s covenant. He said the city’s complaint could be dismissed if officials are able to reach an agreement with the Vellas within two to three months.

In other business, the San Carlos Planning Commission voted 4-1 Monday to approve a four-story, mixed-use building proposed for 1240 El Camino Real, where a one-story commercial building currently stands. The project is slated to provide eight, for-sale residential units and 1,450 square feet of ground-floor retail, and the developer is proposing to designate one one-bedroom unit as affordable for a moderate-income household, according to a staff report.

Chair John Dugan voted against the project out of concerns the one-bedroom unit designated as affordable is slated to be 804 square feet and represents less than 8% of the total square footage dedicated to the housing units in the development. Acknowledging the city’s requirement that developers of this type of project ensure 15% of the units are affordable, Dugan didn’t feel the project met the spirit of the city’s affordable housing goals.

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