As part of a hard-fought effort to bring a new school to the San Antonio area, Mountain View City Council members reluctantly agreed to allow six dense projects -- five of them office developments -- to move forward despite being larger than the existing zoning allows.
Council members agreed at Jan. 16 meeting to allow the Los Altos School District to sell the "right" to build higher-density projects in order to offset the cost of buying land for a new school -- a complex process known as the transfer of development rights (TDRs). In other words, property owners and developers who buy TDRs from the school district are permitted to build taller and more dense buildings than what would normally be allowed.
Most of those projects will end up being office buildings in and around the East Whisman area, along with a proposal by developer Merlone Geier to build an eight-story, 250,000-square-foot office building on the southeast corner of California Street and San Antonio Road, located next to the second phase of the San Antonio shopping center redevelopment. Most of the density -- 150,000 square feet of it -- would come from the TDR purchase from the school district.
Each project will go through the city's so-called gatekeeper process, which is typically reserved for projects that exceed the height and density limits of an area. In order to sway city officials, developers usually pony up money for community benefits including transportation upgrades and affordable housing. In this case, the only benefit likely is paying Los Altos School District money to be used to buy land for a new campus. Although council members agreed to let the gatekeeper requests move forward at the Tuesday meeting, each one still needs to go through the design process and receive the council's final approval.
Last month, the district announced its intent to purchase 8.6 acres of land at the site of the former Safeway and Old Mill office building, located on the northeast corner of San Antonio Road and California Street. With land valued at approximately $15 million per acre, district officials say TDRs are essential to bringing down the net cost of land acquisition.
School district staff say they expect to sell 610,000 square feet of development rights in total, of which 538,000 square feet have been spoken for under agreements inked between the district and developers. At $130 per square foot, the district expects to make a total of $79.3 million from the transactions. One of the developers -- Vanni Properties Inc. -- agreed to buy TDRs but asked to delay its gatekeeper request for up to five years.
The last 72,000 square feet was supposed to go to Google for additional development in the North Bayshore area, but the tech giant backed out of the deal last month. Community Development Director Randy Tsuda said the school district now has a signed letter of intent from Miramar Capital to purchase the remaining TDRs for residential development on 400 Logue Avenue.
A vast majority of the development rights being sold will be converted into office development, which is no surprise given the high cost of building housing and the strong market for office space in the area, said Tim Tosta, a land use lawyer working with the Los Altos School District. He said the district's strategy was essentially cold-calling property owners in the city who might be able to build out developments with additional square footage, and that there was no lack of interest in the leftover 72,000 square feet when Google dropped out.
Mayor Lenny Siegel, who has long advocated for a better balance between jobs and housing in the city, said he was willing to let the gatekeeper projects move forward in order to support a school in the San Antonio area. Given the significant redevelopment going on in the region, he said it may represent the "last chance" the city has to turn that school into a reality.
"It's been one of my major goals to see a school get built there," he said. "I've been willing to accept more offices elsewhere in town because getting a school there is very important."
But the Merlone Geier gatekeeper proposal, in particular, left some council members uneasy. The developer's request included not only an eight-story office building right on the corner with no additional parking and reduced setbacks, but also asked for the project to be exempt from requirements to have ground-floor commercial uses.
Council members allowed the gatekeeper to move forward, but roundly rejected the idea of losing the commercial space.
Council member Margaret Abe-Koga said she was strongly opposed to adding more offices in the San Antonio Shopping Center, which she said was intended to be retail-focused, and that she is disappointed with the existing development in the area. She suggested that the council put a pause on allowing the Merlone Geier gatekeeper request to move forward until the second phase of the San Antonio Shopping Center redevelopment is completed and fully occupied by tenants before accepting any new proposals.
"It's really incumbent on these gatekeeper projects to make sense and fit in with our community. They have to work," She said. "And this one, I just don't think right now I'm ready to say it works."
Siegel cautioned against council members dropping support for one or more of the gatekeeper proposals moving forward, noting that selling development rights is a critical part of the school district's plan to buy land. He said he wanted to avoid any action that would risk killing the deal.
"I'm unwilling to risk the entire project because of our concerns about what Merlone Geier has done at the San Antonio center."
Councilman John McAlister joined the majority of the council in allowing the gatekeeper projects to move forward, but cautioned that Merlone Geier's gatekeeper project could "potentially be the demise" of the Milk Pail Market, which is located on the same corner and relies on shared parking that could be removed under the proposed office development.
The vote on the gatekeeper projects was part of a larger motion to permit the Los Altos School District to sell the TDRs, along with a commitment by the city to contribute $23 million in park funds to help the school district purchase land for a school and adjacent field space in the San Antonio area. The motion passed 6-1, with council member Pat Showalter opposed. Earlier in the meeting, Showalter said she was unwilling to support the use of TDRs unless the district was required to build a neighborhood school on the San Antonio site.
Gatekeeper projects approved
303-311 Ravendale Drive
Developer: Sand Hill Properties
Proposal: Replace one-story office building with new six-story 180,000-square-foot office building and a three-story parking garage
189 N. Bernardo Avenue
Developer: Sand Hill Properties
Proposal: Retain existing buildings and add a new four-story 90,000-square-foot office building
465 Fairchild Drive & 636 Ellis Street
Developer: The Sobrato Organization
Proposal: Demolish two two-story office buildings and replace with a new six-story 260,000-square-foot building
355-365, 401, and 415 E. Middlefield Road
Developer: SummerHill Homes
Proposal: Demolish two one-story buildings and replace with 250 flats and condominiums ranging from four- to seven-stories tall and a 0.4-acre park
301-381 E. Evelyn Avenue
Developer: MV campus owner, LLC
Proposal: Replace existing surface parking with a new, four-story 125,000-square-foot office building and above-grade five-story parking structure
2595 California Street and 405 San Antonio Road
Developer: Merlone Geier
Proposal: Replace existing one-story buildings with eight-story, 250,000-square-foot office building