South City approves Infinite 131 project

In addition to the Infinite 131 project, the developer, SteelWave, is also spearheading several other projects throughout the city, including Discovery Station, situated on Spruce Avenue and El Camino Real, a 15-acre mixed-use project that will include an under-construction Safeway, as well as 184 residential units and a biotech campus. The city also approved the developer’s plans for another campus adjacent to the Infinite 131 development at 101 Terminal Court.

The area is situated in the historically industrial area of Lindenville, however, the city has made plans to revitalize the area with more development, both commercial and residential, over the coming years. The site of the 131 Terminal Court project currently houses Golden Gate Produce Terminal and a number of other industrial operations, including loading docks and trash compactor areas.

The developer is subject to several impact fees, with the majority going to transportation and affordable housing funds, about $59 million and $29 million, respectively. Part of the development agreement with the city was to also include a child care facility. Councilmember Mark Nagales said he is reluctantly supporting the proposed center, as it will still relieve strain on other day care centers in the city, but wished it wasn’t only going to cater to on-site employees.

“I guess I’m OK with it, but I’m not happy about the fact that it’s market rate, when it should be affordable,” Nagales said.

While there isn’t a shortage of proposals for office and lab space in the city, the office market, including for the life science industry, has been slow to recover. In the last month, the Planning Commission supported agreements with developers of two massive life science developments — one at 180 El Camino Real and another at 800 Dubuque Ave. — that would extend their city approvals, or entitlements, for 10 years, giving them more time to secure financing and build out the project.

In Belmont, three of its five major biotechnology projects have been withdrawn or indefinitely paused as of April. According to a CBRE market report, last quarter saw a 32% vacancy rate in life science buildings across the Bay Area — nearly four-fold the rate from 2022. The amount of lab space under construction in the region as of last quarter has also been significantly less than prior years.

With less funding from the National Institutes of Health and pharmaceutical tariffs, the report added, midsize life science firms are reassessing their real estate needs, which has also contributed to higher sublease activity.

The problem is particularly acute in South San Francisco, known as Northern California’s hub for biotechnology firms. According to a previous staff report, the city has issued one new building permit for a life science project in the last two years, and other projects that are already underway, such as Kilroy Realty’s Oyster Point and Southline, mean the anticipated supply is only contributing to higher vacancy rates.

“I think that it’s such a great use on top of the freeway there. It’s a signature building that will eclipse what’s on the north end of town which, I think, is quite spectacular also,” Vice Mayor Mark Addiego said. “I’m very excited the day that this happens.”