San Mateo City Council weighs in on Hillsdale redevelopment

Bohannon Properties, owner and developer of the site, submitted the formal application earlier this month. The redevelopment could take more than a decade to build, with the goal of completing it around 2040.

Neighboring residents have expressed mixed feelings at the council meeting and during previous community meetings. Some, including Dana Sahae, are concerned about the phasing of the project, with the hope that residential construction won’t take place years after the commercial and retail development. The same concern was shared by city staff and councilmembers, hoping the townhomes and apartments would be built “concurrently and proportionally to the nonresidential components.”

“I represent Bay Meadows, and of the things that pains me literally every week is driving through and seeing two city blocks that are vacant almost 20 years on,” Mayor Rob Newsom said.

The Bay Meadows development is an 83-acre site that was approved 20 years ago and comprises a mix of residential buildings, commercial space and public parks. The initial agreement was meant to govern development over 18 years, expiring at the end of 2023, but has seen a number of delays, with a small portion of development still in the works.

Andrew Turco, vice president at Sares Regis, Northern California, another developer on the Hillsdale project, said the team is also incentivized to get the residential portion of the project up as soon as it can.

“There is a natural market forcing mechanism in that it just doesn’t make financial sense, honestly, to leave half the site undeveloped if housing isn’t developed. It’s just a poor business move,” Turco said. “There is a natural incentive to build the entire project out in its entirety as it is proposed.”

While the development could bring in more property tax, some were also concerned with the sales tax loss once the mall is gone. According to a presentation, the full project would generate an additional $1.27 million to $2.2 million in annual net benefits to the city’s general fund, almost a 30% increase from the revenue received at the site today.

Dealing with a wave of stricter state laws, cities have been increasingly limited in the types of mandates they can impose on projects. There are certain objective standards the project must follow, but otherwise, city leaders must rely on good faith assumptions for other commitments, such as substantial community benefit contributions or certain amenities, such as keeping a grocery store at the site.

“The kind of requests that the city could have made in the past and requiring, say, a development agreement, as was the case in Bay Meadows, that’s not really on the table right now,” City Attorney Prasanna Rasiah said. “The city’s discretion is much more limited today than in a prior iteration of this project in a different time period.”

Due to its status as one of the largest, and therefore possibly one of the most consequential projects in the city, neighbors wanted more details on the impact on traffic, environment and city infrastructure. Deputy Mayor Adam Loraine said the concerns were valid, however, he also said the project is in line with the city’s long-term vision.

“I also ask for some open mindedness for the change that a project like this could bring to our city, remembering that this is a project that will be coming in the present but largely into our future and serving future needs,” Loraine said.