San Mateo City Council seeking to max housing at Talbot’s site

The city has asked the developers Prometheus Real Estate, Harvest Properties and Alta Housing to explore more opportunities for more affordable housing on the site, something the council fully agreed on at its May 15 special meeting.

“I agree with staff’s request to the development team to please explore the full extent of the city’s parcel for affordable housing, understanding that more units could require a bit more of a financial contribution to fund them,” Councilmember Adam Loraine said.

The developers are looking at design changes to the commercial floor areas and obtaining financing for the additional units. The council views the site as an opportunity to address the affordable housing crisis due to its downtown location and proximity near Caltrain.

“I would really push to do more below-market-rate housing there if it’s possible,” Councilmember Rich Hedges said. “It’s just the perfect spot.”

The project, called Bespoke, calls for an underground parking garage with 38 residential parking spaces and 80 commercial spaces. A shared parking agreement would allow people with residential units to access a portion of the commercial spaces during non-business hours. The ground floor space in the affordable housing building will house the nonprofit Self-Help for the Elderly, which helps mostly low-income clients from minority communities and provides services for around 40,000 older adults annually in the Bay Area. The group is moving from the Central Park Recreation Center.

The city entered into an exclusive negotiating agreement with Prometheus Real Estate, Harvest Properties and Alta Housing in 2021 to redevelop the city-owned surface parking lot at Fourth Avenue and Railroad Avenue. Talbot’s, the former toy store and bike shop, next to the city-owned parking lot, closed in 2019 after 66 years. The site is across the tracks from the Kiku Crossing development, a seven-story affordable housing project and parking site at 480 E. Fourth Ave. The group has acquired development rights to all of the parcels on the block, significantly increasing the project size, according to a city staff report. The previous proposal suggested 118,000 square feet and 52 units. The city projects the City Council can give final entitlement approval in early 2024. The development team will have a 99-year ground lease for the city’s parcel at $1 per year, and the city is given $2.75 million for construction of the 60 affordable housing units. More than 50% of the units will have two or three bedrooms.

The parking site will be constructed first to create developmental space for housing, resulting in the commercial building finishing first, according to the city.