Housing dropped from TOD planned at Millbrae BART/Caltrain
- Published Wednesday, January 23, 2008, by the San Mateo Daily Journal
Market may kill housing by BART
By Heather Murtagh
What was once planned as a massive model for transit-oriented
development in Millbrae with housing near the BART station may turn
into office-focused retail because of a recent shift in market
interest in such projects and the credit crunch for lending.
Plans changed from residential-focused to an office-focused retail
development with many concerns raised by the City Council that
developers involved need to make Millbrae a priority. The council
unanimously approved a 90-day extension last night with warnings
that a lack of forward movement could cause the city to rethink the
partnership. The City Council first agreed to allow Fancher Partners,
a development agency out of Irvine, Calif., to move forward on its
proposal for the area around the Millbrae Bay Area Rapid Transit
Station in 2006 -- known as Site One. The exclusive contract was
extended a number of times since with the final, five-month extension
granted in September including a timeline with benchmark goals. The
goals were not met.
Vice Mayor Robert Gottschalk was concerned to see the change when a
few years ago only 35 percent of local office space was filled but
was reassured by support of potential financiers present.
"I don't think any of us wants to see more iterations on the
extensions," he said. "If everyone come together in 90 days that's
great. But there will be disappointment and rethinking if we find
that not all the pieces can be brought together in 90 days."
Market conditions completely changed the project in the past 90 days,
Charles Fancher of Fancher Partners explained. "It changed because of
market conditions. ... We're disappointed to say it's not done, but
we need you to understand the obstacles we ran into."
Fancher agreed if progress is not made in 90 days there may be flaws
with the plans that should be addressed.
Costs for residential development went up while the market slowed,
he explained, making the project less than feasible.. More than 230
condominiums were planned in the 2006 council-approved Site One
The proposed vision dubbed the Millbrae Station Pavilion, is a six-
story, mixed-use development covering about eight acres of land. The
two-building configuration would be centered around a station square.
The area was visioned to include retail, restaurant, a seven-screen
cinema, 32,000 square-feet of office space, 231 condos and a 131-room
The design will stay the same with office space where condominiums
were planned, explained Fancher.
The change from residential to office space use is a return to the
original vision of the site, explained Community Development Director
Ralph Petty. "We're kind of coming full circle," he said noting that
four years ago there was no office market. Now the housing market is
Additionally, Petty was not sure any other development firms were
earnestly interested in taking on the project.
Councilman Dan Quigg was in favor of the change noting the proximity
to BART, Caltrain and an airport. He also was hoping for a developer
agreement to be signed in fewer than 90 days.
Although the extension remained as 90 days, both city staff and
Fancher agreed such a feat could be possible -- meeting the first
of the benchmarks set in September.
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 yet to be met.
Creating an agreement is estimated to take an additional 90 days. A
defining factor is the money Millbrae's Redevelopment Agency will put
up-front to cover costs. The 66 percent of land is not confirmed,
however, additional up-front money from the city could allow for new
offers, according to a report written by Petty.
San Francisco-based Lincoln Property Company and Los Angeles-based
BlackRock wrote non-binding letters of intention to support the
project. Representatives from both spoke favorably about moving
forward last night.
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 Victoria Avenue on the north, by an extension of
California Drive to the east and by Millbrae Avenue to the south.
Heather Murtagh can be reached by e-mail: heather@...
or by phone: (650) 344-5200 ext. 105.
[BATN: See also:
Another delay for TOD at Millbrae BART/Caltrain; housing scrapped
Millbrae BART/Caltrain TOD plans appear stalled
SamTrans to keep HSR on existing two Caltrain tracks in Millbrae
Millbrae fears adding HSR tracks to train station will derail TOD
Millbrae claims more tracks for HSR, Caltrain threaten $250m TOD
Stalled Millbrae BART TOD speeds new downtown parking garage
Millbrae BART TOD stalled, blocks new downtown parking garage
Land acquisition slows TOD plans at Millbrae BART/Caltrain
Millbrae council moves TOD redevelopment plan ahead
Millbrae eyes TOD arts & convention center near BART
Mixed-use TOD going up near Millbrae BART/Caltrain
Millbrae TOD project near BART cancelled