San Mateo City Council promotes workforce housing and parking

San Mateo City Council promotes workforce housing and parking City to reissue request to developers for downtown lots By Samantha Weigel Daily Journal staff 7 hrs ago 3 With affordable housing and parking in high demand for downtown San Mateo, city officials will leverage two valuable lots as they urge the development community to compete for the right to build. The City Council discussed the financials of ideas received by 10 developers in a closed session meeting this week, before instructing staff to outline a formal request for proposals with tall orders. The preliminary parameters include requiring any development on the city-owned sites to include 164 housing units — a minimum of 35 percent of which must be offered at below-market rates — and 535 publicly accessible parking spaces — which includes replacing the 235 currently available spaces. But the mix of nonprofit and private developers will be encouraged to offer various creative proposals balancing the city’s budget and its goals, said Deputy City Manager Kathy Kleinbaum. “We fully expect we’ll get a range of [proposals], 35 percent up to 100 percent affordable, and we welcome that,” Kleinbaum said. “What we’re really looking for is [a developer] that can be really creative, really help us look at alternate financing models and limit the amount of money the city has to put in while maximizing our goals.” Any project will go through a public hearing process, and Kleinbaum stressed these initial steps are about choosing a developer with which to work. Buildings will be subject to the city’s voter-approved 55-foot height limit and density restrictions. The city wants to retain ownership of the land but offer it through a long-term ground lease, likely resulting in a rental project, Kleinbaum said. The sites straddling Fifth Avenue just east of the train tracks are a short jaunt to the downtown Caltrain station and in an area slated for transformation. The properties were purchased for $5 million in the 1990s with redevelopment agency funds before the governor dissolved the affordable housing funding mechanism. It’s now a unique opportunity for San Mateo to leverage land now valued at nearly $16 million. “We want proposals that dramatically increase the available off-street parking downtown, and provide the maximum amount of housing,” Goethals said. “The location and its proximity to the downtown Caltrain station make it ideal to increase the available parking for downtown and build another transit-oriented development.” Satisfying community priorities will entail the city making significant financial contributions, aside from the land. Paying for parking and housing One major council goal is promoting workforce housing, or below-market rate opportunities for people making between 80 percent and 120 percent of the area median income. But traditional funding mechanisms such as federal tax credits, or even San Mateo County’s sales-tax generated Measure K revenue, is only available to units for those making low incomes, or up to 60 percent of the average for the region, Kleinbaum said. The city will consider projects with a mix of affordability from low income to market rate, but is hoping to prioritize workforce housing that’s often the most difficult to finance. The goal is to understand a spectrum of options and the financial implications, she said. “We’re really going to try to make a push for [workforce] units,” Kleinbaum said, adding “there’s no other available funding sources other than city funds to help finance those units.” The city currently has about $2 million in its affordable housing fund and is in the process of collecting more commercial linkage fees — money collected from developers to help offset the impact of new construction on the housing crisis. The city also has about $5 million dedicated to creating new downtown parking spaces, but it’ll need much more to help finance the construction of a 535-space structure, Kleinbaum said. Construction costs typically run about $25,000 to $60,000 per parking space depending on whether it’s above or below ground. Known as the Worker Resource Center and former Kinko’s lots, the initial requirement was for developers to at a minimum replace the 235 publicly accessible spaces. But after discussing options, the council agreed to leverage the sites to help meet projections that downtown needs hundreds of new spaces to accommodate future growth, Kleinbaum said. Councilwoman Diane Papan said this is a unique opportunity to build something that will meet long-term goals. “This is our one shot to do something,” Papan said. “We took a look at what our biggest needs are — obviously housing and then parking to service the downtown businesses. So we’re really trying to get the most bang for our buck within those two goals.” An interested bunch Following a broader request for qualifications, 10 developers submitted ideas to the city and officials are hopeful a little competition will enhance options. Interested developers include Eden Housing and Pacific Companies; Sares Regis; Windflower Properties; Bridge Housing and Bay Meadows master developer Wilson Meany; Raintree Partners and Anton Development Company; the Core Companies; MidPen Housing; Civic Partners; Urban Housing Communities; and Domicile 1 — EAH Housing and EBL&S Development, according to the city. Several proposals came from partnerships between nonprofit and private developers, and the city is anticipated to chose one to build both sites. Proposals were initially graded based in part on financial feasibility, but some used questionable or differing assumptions. Kleinbaum said the council decided to give all 10 developers another opportunity while including more precise parameters. “We want to leave the door open,” Kleinbaum said, but “we don’t expect all the developers that submitted to resubmit.” When it comes time to weigh options, Papan said her considerations would include financial soundness, how much subsidy is needed from the city, and how requirements are met. Kleinbaum said staff anticipates issuing the request in September, with the goal of choosing a developer by January. But, she noted, there will be plenty of room for negotiations and picking a developer doesn’t necessarily mean the proposal won’t change. The public will also be engaged in the planning that will go through the normal city entitlement process, she said. Nearby neighborhoods have expressed concerns about the lots slated to house new residents, and the impacts to traffic. Some have suggested other types of amenities be included, such as public meeting spaces for neighborhood groups. Some also raised concerns about the recent meetings being held in closed session. Kleinbaum said providing the council time to digest the complications of real estate financing was important to tailoring expectations. She noted while some preliminary project designs or renderings may have been appealing, the city must first contemplate the fiscal implications and feasibility. “We’re trying to select, more than anything, a developer to partner with,” Kleinbaum said. “We’re not giving this project any special preferences, it’s not going to bypass any step of the planning process, it’s going to have that full public scrutiny. But we’re just trying to avoid picking a project based on window dressing.” samantha@smdailyjournal.com (650) 344-5200 ext. 106 Twitter: @samantha_weigel