In a study session Tuesday, City Council members rejected a new redevelopment proposal for San Antonio shopping center, telling the developer to come back with a project that fits the city's standards for density and height.
At the corner of California Street and San Antonio Road developer Merlone Geier proposes a 150-room hotel, 300,000 square feet of retail, and space for 3,000 employees in three office buildings, one of which would be the tallest in the city at 160 feet and 11 stories.
The project could mean $2.6 million a year in hotel, property and sales tax revenue for the city, Merlone Geier's Mike Grehl told the City Council Tuesday.
"Our city is not for sale," said council member Jac Siegel, who said he was shocked by the project's density and scale. "You can't have somebody come in and say, 'We'll give you this much revenue; let us do what we want.'"
Council member Ronit Bryant said heights of six- to eight-stories were supported by the city's draft general plan guidelines for the site, and "suddenly we have 11. That makes no sense."
City planners said the proposal was "significantly above" the density called for in the draft precise plan for the shopping center, and would therefore require a "significant public benefit" to meet city guidelines.
"We're talking about multi-millions if you are going to provide public benefit," said council member Laura Macias. "None of that type of public benefit has been proposed here."
The developer has said that the hotel is a public benefit and that the size of the office building was necessary to pay for the cost of developing the full-service hotel, something the city has long sought and once considered subsidizing with $30 million at a different site in North Bayshore.
A pedestrian tunnel under California Street was suggested as a potential public benefit, while council member Margaret Abe-Koga suggested the developer contribute to a new community center at Rengstorff Park.
"I understand the demand for a hotel because you could rent a yurt in Mountain View today to Google," said Doug Delong of advocates for affordable housing. "I don't think there's enough public benefit lipstick that can be put on this pig to make it salable. The hotel is jammed into this corner and the land-use mix is wrong. This is the first proposal I can recall in front of the city I would describe as obscene."
City Council members said they had received a letter from Merlone Geier assuring officials that the firm was following the law after several business and property owners accused the developer of using a cyclone fence to force them to sell their land. The fence, now removed after city officials said it was was erected without a permit, blocked access to a parking lot at Ross and BevMo. One neighbor said it was proof that Merlone Geier would be a bad neighbor.
"If we're building a neighborhood in the area, then going by the legal requirements is not good enough," Bryant said. The project's plans also wall off the small businesses at the corner, including Milk Pail market, which has relied on a shared parking agreement with Ross to meet city requirements. "If those properties were willingly accepted into the project and made a part of it, I would look at that very favorably."
Merlone Geier's architect and landscape designer presented detailed images not released to the public, enthusiastically pitching an interior urban environment that would be created in the courtyards and promenades between the buildings. But several residents criticized the project for facing inward too much and leaving nothing but parking garages and trees facing San Antonio Road and California Street. Council members noted that Santana Row in San Jose is similarly designed and was often cited as an example of what residents wanted for the site.
"I'm not a planner, I'm not an architect, I have no idea what this should look like," said council member Tom Means, questioning all the criticism from the public. "Look at who is putting something on the table, who is taking some risk."
Council members declined a request from zoning administrator Peter Gilli to take a vote on whether the general mix of uses in the project was acceptable. Means said he was concerned the council was being too vague and would slowly kill the project.
"I do think having a mix like this is appropriate," said Mayor Mike Kasperzak. "Castro is an intimate street; San Antonio Road is not an intimate street. People like Santana Row because it is inwardly focused. It does look pretty blockish on the outside. Inside it feels good. We have the same problems here."
Kasperzak agreed that the buildings were too big.
"It's clearly too big for the community," he said. "I think that's what is really important."
The council had also rejected Merlone Geier's first phase of the redevelopment at one point. The Safeway, five-story apartment buildings, and dozens of retail spaces are now under construction at El Camino Real and San Antonio Road.
"I think the developer is probably over there in shock again, sorry guys," Kasperzak said.