Millbrae redevelopment given one last gasp

Attempting to maintain the hope of one day offering an area where commuters can leisurely exit Caltrain to grab food, catch a movie or walk home, the Millbrae City Council extended land negotiating rights around its BART station for a sixth time.

Little change has occurred since the Millbrae City Council unanimously agreed to allow Fancher Partners, an Irvine, Calif.-based development agency, to move forward on its 2006 proposal for the area around the Millbrae Bay Area Rapid Transit Station - known as Site One. Fancher pointed to the declining credit market and pending eminent domain June ballot measure putting a damper on the ability to secure land. Last night, despite a formal request to extend the agreement, the council gave Fancher until July 8 to deliver a site plan and a timeline on securing the land and funding for the development.

"It's highly unlikely that if none of the benchmarks are met that we will go further with the project, at least with the current developers," Mayor Gina Papan said after the 4-1 extension vote. Councilman Paul Seto voted against the extension.

The potential to use eminent domain has been an underlying issue throughout the process. Charles Fancher of Fancher Partners pointed to a looming ballot measure as the single issue postponing the project. In June, California voters are faced with Proposition 98 - an initiative that would limit the use of eminent domain and repeal rent control statewide.

"The factual reality is we had and have more than two-thirds of the property, specifically 77 percent, with agreements. But the contracts weren't signed because of Prop. 98, [and will not be signed] until it's defeated. Is Proposition 98 an excuse? No, it's a reality," he said.

Both sides seemed to be at a loss as to the best way to move forward.

Community Development Director Ralph Petty suggested the city, "step away, take a deep breath and look at other alternatives."

Fancher Partners did not submit a formal extension and Fancher repeatedly said they were not seeking one before ultimately suggesting a shorter extension.

Fancher originally gained exclusive negotiating rights in 2006. The last two extensions - in September and January - came with three benchmarks. The three benchmarks were: Prepare a development agreement outlining the city's up-front contributions; secure project financing; and place at least 66 percent of the project lands in a binding contract. Those were not yet met.

Now, Fancher Partners will return on Tuesday, July 8 with a development agreement, which includes a site plan and a plan for attaining the remaining goals. The extension gives time to analyze how the June results will affect the project.

The council seemed hesitant to either move forward or cut ties with Fancher.

Councilman Dan Quigg bluntly said he expected to hear that much effort was put forth to no avail in July. Seto echoed those concerns adding, if no extension is requested, the city may as well move on.

Councilwoman Marge Colapietro and Vice Mayor Robert Gottschalk shared the concerns but pointed out much work would be lost if the city started with a new development team. More importantly, Gottschalk said, no one has shown interest to fill that position.

The effort to develop the land in Site One near the Millbrae BART Station began in 1996. The Site One area ends at El Camino Real on the west, by the yet to be built Victoria Avenue on the north, by the extension of California Drive to the east and by Millbrae Avenue to the south.

The proposed vision - which was last visited in early 2006 - dubbed the Millbrae Station Pavilion, a six-story, mixed-used development covering about eight acres of land.

The two-building plan would be centered around a station square. The area would include retail, restaurant, a seven-screen cinema, 231 condominiums, 32,000 square feet of office space and a 131-room hotel.