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Apartment Builders Spark El Camino Rebirth In Mountain View

| By Sharon Simonson |

Developers including Prometheus, UDR Inc., Archstone and the Urban Housing Group have filed applications with the city of Mountain View seeking to build more than 1,000 apartments in a two-mile stretch of El Camino Real, the historic state highway linking Santa Clara and San Mateo counties.

The change on five new sites and the expansion of a sixth should rejuvenate a boulevard that has been fossilized for decades by obsolete real estate, remaining largely intact even in the face of the dot.com boom. The segment constitutes the entire Mountain View stretch from the southern limit at Sunnyvale to its northern edge with the city of Palo Alto.

The city’s newly adopted general plan has been a major impetus, developers said, with many filing applications in anticipation of the new standards. Under the updated city land plan, residential mixed-use projects along El Camino are allowed to reach densities as high as 1.85 square feet to every foot of land. That’s up from a former allowable density of 1.35, a standard that precipitated little developer interest over the last decade. Developers also are being strongly encouraged to include ground-floor retail.

The string of projects ties seamlessly to a similar redevelopment rush along the El Camino corridor in neighboring Palo Alto. Two Hilton-branded hotels are being built, one by BSB, the former Barry Swenson Builder, in addition to housing. They are replacing a former bowling alley and a clutch of car-rental agencies and one-story development, said Amy French, a long-time Palo Alto city planner. “I think there is a resurgence,” French said. Neighboring Los Altos this summer also approved a 205-unit townhome and apartment development at 4750 El Camino.

Palo Alto has not adopted new regulations but sees fairly continuous redevelopment on the roadway, French said. The Great Recession translated only to “a bit of a lull.”

Historically, Caltrans, the state transportation department, has controlled El Camino as a state road and has limited what could be done, she said. But that grip has loosened as cities have pressed back, in part through the Grand Boulevard Initiative involving nearly two dozen cities bisected by the roadway.

“A lot of El Camino is junky junk,” French said. “It used to be road houses and liquor stores. Cities regionally are taking back the road.”

Mountain View has already embarked on a large-scale redevelopment at El Camino and San Antonio Road, the Village at San Antonio. Merlone Geier Partners continues construction on approximately 328 high-density apartments at El Camino Real and Mountain View’s San Antonio Road. The company, which has San Francisco and San Diego offices, is redeveloping more than 16 acres with apartments and 175,000 square feet of retail.

Merlone Geier has now approached the city about the redevelopment of an additional nearly nine acres in the same vicinity with 700,000 square feet of offices, a top-tier business-class hotel and additional retail, including new digs for an existing Ross Dress for Less. The council wants the developer to scale back the offices, but Merlone Vice President Mike Grehl said the company remains committed.

“Our project has been a catalyst for [redevelopment in] the immediate surrounding areas, but the primary driver is truly the job creation and the quality of life in Mountain View, Los Altos and Palo Alto,” he said. The existing apartment stock is not universally great, and the tech workers pouring through the doors of Google Inc., Facebook Inc. and LinkedIn Corp. want and can afford higher quality.

“I have heard that a lot of people want to live in the city [of San Francisco] and commute south, and some will want to do that. But the sheer mass of the number of employees being hired is great,” he said.

Prometheus anticipated the changes to the Mountain View general plan two years ago, said Jon Moss, development partner for the company, the largest private owner of apartments in the Bay Area. Prometheus wants to redevelop 2.5 acres that have been home to the Tropicana Lodge and a Western Appliance store at 1720 W. El Camino Real. On Oct. 16, it is scheduled for hearing before the Mountain View City Council to request permission to build additional apartments on a third site at 1616 W. El Camino Real next door. Moss is not worried about overbuilding.

“There is still significant pressure on housing. The valley’s job growth in the last few years has been very significant, so even with the number of new projects, on most of the Peninsula, I would argue that the overall constraints are pretty high,” he said.

Prometheus is pursuing four apartment projects in Mountain View, including two in downtown, investing “hundreds of millions of dollars,” Moss said. “It is something we don’t do without a lot of confidence in the local market and economy.”

A part of the city’s El Camino Real remake includes upgrades to the pedestrian experience as well, said Scott Plambaeck, a senior planner who is handling Prometheus’ El Camino projects. Sidewalks will widen to approximately eight feet and be set back from the roadway by a curb, trees and tree wells, he said, akin to the standard in downtown Mountain View.

“The cities are finally waking up to the fact that they have a diamond in the rough—and rough is a euphemism. [El Camino] is terrible,” said UDR’s Don Mackenzie, who oversees Western markets for the Colorado real estate investment trust.

UDR, which last year bought 388 Beale in San Francisco with 227 units for $90.5 million, wants to redevelop 2.6 acres at 1984 W. El Camino. The property is currently home to an operating hotel, which UDR owns. But the economic value of the land far outstrips the income generated by its current use, Mackenzie said.

Google employees testified repeatedly to the city council during general plan hearings that they would rather be on bicycles riding to work than on buses, he said. “As an outsider you read about El Camino and its connectivity to the great tech companies. When you see it, you say, ‘What happened here?’”

With all of the new development, the next question regional planners will be expected to answer will surround better public tranport, Prometheus’ Moss and Palo Alto’s French said. Bus rapid transit is the current focus.

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