The lot at 449 Franklin St. that the homes reside on protrudes 35 feet into a city-owned lot at Bryant and California Streets. The purchase will improve city's chances of leasing the adjacent 1.45-acre city lot for development, possibly for a grocery store or some other retail.
"It then becomes a rectangular parcel," Economic Development Director Ellis Berns said of the city lot slated for development. "We think it will make it a more attractive parcel."
Developers have indicated that the Franklin Street property is a "limitation" on development of the city property, said Dennis Drennan, Mountain View's real property manager.
The City Council turned down two proposals in January for a retail space with housing above it at city-owned lot. The proposals would not have provided enough of a financial return on the property, city staff and council members said.
"If the site were bigger and in a more favorable market, it would make for a very interesting mixed-use project," said Dean Martin, development director of Legacy Partners, which had its proposal for the site turned down in January. "I think it would be a win-win for everybody.
The city has been managing an ongoing feasibility study for a grocery store downtown, but so far the study has not come to any conclusions, Berns said.
An additional $135,000 goes to tenant relocation and repairs to the three homes on the Franklin Street lot for a total of $1.65 million in funds from the city's downtown revitalization tax district. The household at the rear of the property would eventually have to move, Drennan said.
Early next year, the City Council will discuss their preferences for development of the parcel and the city will try and market the property again, hopefully in better economic conditions, Drennan said.