San Mateo OKs large office project

After two years of planning, an office project proposed near the Hayward Park Caltrain Station was unanimously approved by the San Mateo City Council last night.

The Hines project will sit on two parcels of land at Delaware Street and Concar Drive and will replace the Telecenter Appliance store and old Denny's restaurant and provide "class A" office space. The council also approved an eight-year development deal for the project that will net the city $700,000 in public benefits, including landscaping improvements, pedestrian safety measures and bicycle pathways.

The total project area is 3.4 acres and the buildings will be four stories tall and have a total of 416,040 square feet of office space.

Hines sought the development deal because it cannot secure the financing now to build the project. The eight-year extension would allow more time for the developer to find financing.

Residents of the Sunnybrae, 19th Avenue/Park and Fiesta Gardens neighborhoods had asked for the project to be scaled back due to traffic impacts to the area.

There is less traffic now at the Delaware/Concar intersection than there was in 2007, city planner Lisa Ring said last night.

Since the project is considered to be transit-oriented development, Hines is required to produce 25 percent less trips by getting people to ride the train or bus to work.

Councilman Robert Ross, however, questioned how that condition would be enforced.

"I still have some concerns about traffic and pedestrian safety," Ross said. "The big challenge ahead of us is getting people on transit."

The city will monitor traffic conditions at the intersection and the developer could ultimately be hit with municipal code violations if traffic is not reduced in the area.

The developer is prepared to spend up to $390,000 in landscaping and maintenance for the spaces surrounding the project area, much of which is Caltrans right-of-way property.

Hines is also willing to fund flood-control engineering for the neighborhoods adjacent to the project area to the tune of $100,000. Another $93,400 is set aside for bicycle path improvements along the Caltrain corridor.

The development deal will allow Hines to attract a major tenant.

The Hines project is in the San Mateo Rail Corridor Transit Oriented Development Plan area. Another development in the area, Station Park Green, is also in the public planning process.

Station Park Green is a 599-unit mixed-use development proposed to be built right across the street of the Hines project where a Kmart currently sits. EBL&S Development recently proposed $1.7 million in public improvements for its transit-oriented Station Park Green proposal for similar economic reasons.

The city is hoping the intersection at Concar and Delaware will be another gateway for the city but obtaining developer financing is proving to be a challenge.

The city will receive a cash payment from the developer if at least one of the buildings are not constructed or under construction sometime in 2018.

"Let's hope it doesn't take eight years to build," Mayor John Lee said.

The developer has pledged to use 100 percent union labor on the project.

"This project will benefit from solid, outstanding union labor," Lee said.

Lisa Lewis, senior project manager at Hines, said property values will increase in the neighborhoods near the project and that the office complex will replace a current eyesore.

The city will get up to $2 million in one-time fees from Hines once the building permit is granted.