Talks continuing for Talbot’s parking lot development plans

At its April 19 special meeting, the City Council evaluated and provided feedback for improvement on the four developer proposals, with plans for another study session. Because negotiations are ongoing, the city could not comment on proposal details and feedback.

Mayor Eric Rodriguez said the options have a lot of potential, and his focus is picking the best overall one for San Mateo.

“We took a look at a lot of great proposals, and we were just discussing the merits of each to determine next steps,” Rodriguez said.

Matt Franklin, president and CEO of MidPen Housing, said a preliminary analysis showed the project could be a mixed-use option with 60 apartment homes for rent and ground floors available for commercial use. Franklin said MidPen has an agreement with the nonprofit organization Self Help for the Elderly in San Mateo at 50 E. Fifth Ave. to move in should the proposal be selected. Franklin also highlighted the project is two blocks away from Kiku Crossing, an approved affordable housing development the company is working to construct. He also highlighted the site’s proximity to public transit centers and downtown as important.

“It’s not that big, but it’s in a great location,” Franklin said.

Tim Dunn, the associate director of real estate development with Mercy Housing, said his company presented the option of a six-story building with 60 units of affordable senior housing. He said the council expressed interest in family housing, and it would consider that as well if its proposal is accepted. He said initial thinking is the building would not be mixed use.

“There’s been a big need for senior housing in San Mateo,” Dunn said.

Preston O’Connell, a partner at Harvest Properties, did not comment on the design details of its proposal due to the early timeline. However, he said the property was appealing because of its proximity to transit, its established downtown location with amenities and lots of great energy in the area. He declined to say if Harvest Properties was interested in redevelopment of the whole block.

“We are really excited about the potential opportunity to meet the city’s and community goals for affordable housing on that site,” O’Connell said.

Harvest Properties is collaborating with Prometheus Real Estate Group and Alta Housing on the proposal, but the exact nature of the collaboration and responsibilities is still being discussed, O’Connell said._

“We are still working through those details,” O’Connell said.

The City Council April 19 identified the best pieces of information from each proposal, and city staff then brought back input to the developers for potential modification to proposals, Assistant City Manager Kathy Kleinbaum said.

The developers have several weeks to revise offers based on City Council feedback. Kleinbaum said in around a month the council will go back into a closed session for further discussion and potentially pick a proposal. Of the four different proposals, Kleinbaum said three similar ones rose to the top.

“We are very excited to have all these options,” Kleinbaum said.

There are 57 parking spaces at the vacant Talbot’s Toyland parking lot site at Fourth and Railroad avenues. The former retail store next to the city-owned parking lot closed in 2019 after 66 years. The property the store sits on is privately owned. If a company bought or developed the city-owned parking lot, it would likely have to acquire adjacent properties to redevelop the whole block.

Kleinbaum said the city is still in the preliminary negotiating process, with the meeting April 19 the first time the City Council saw the details and discussed and provided feedback on the proposals. The city is interested in multi-family affordable housing and maximizing the number of units.

In January, the City Council declared the parking lot property as surplus land after declaring interest in exploring development opportunities at a Nov. 16 study session. A city must declare the property surplus land or exempt surplus land before selling or leasing it through the Surplus Lands Act.

The council has expressed a preference for a long-term ground lease for the Talbot’s Toyland parking lot downtown. A long-term lease allows the city to own the land and lease it out, an agreement for 50 years on average. It is similar to a sale but enables the city to retain ownership and make changes if something goes wrong. The city must negotiate with interested groups once it declares the property surplus land, but it is not required to sell the property.

Kleinbaum said no price for the property is set yet, and the city’s focus was on creating affordable housing options in San Mateo through land contribution.

“This isn’t about revenue generation,” she said.

Developers have also expressed interest in the city-owned Ravioli House parking lot between Fifth and Sixth avenues, with one proposal provided for the property. However, the city is unlikely to move forward with a development at the Ravioli House parking lot currently due to limited zoning options that don’t allow for affordable housing development. Kleinbaum said the area would need to be rezoned to be viable, with the potential for the City Council to consider a rezoning process as part of the city’s general plan.

curtis@smdailyjournal.com

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