63,000 SQFT Office Development in San Mateo Stalled Due to Historic Concerns

San Francisco Bay Area, San Mateo, Wall Street Properties, PG&E, Sacramento, California Office of Historic Preservation, Caltrain
Image Credit: Wall Street Properties

By Meghan Hall

The entitlement process in the San Francisco Bay Area can be extensive and time-consuming, even with straight-forward, new development projects. Proposed developments might take years to get the necessary approvals to break ground, sometimes forcing landowners to re-evaluate the best course of action for the future of their properties. Attempts to both sell and redevelop a 1.38-acre parcel at 940. S. Claremont St. in San Mateo, Calif., have been mired over the site’s changing designation as a potential historic resource. In July 2018, San Mateo, Calif.-based Wall Street Properties, submitted a pre-application on behalf of a private owner to renovate two of the current buildings on the property and construct an additional three-story structure on the site. However, the 63,600 square foot project has seen little movement since its submittal last year, and the City is still examining the development team’s pre-application.

“The historic designation has impacted the project significantly,” said Victor Catanzaro, owner of Wall Street Properties. “If it weren’t for the historic aspects of the property, we would raze the buildings and start from scratch at a considerable cost savings. Because the buildings are of the characterization that they are, it has imposed more considerations when it comes to renovating the existing buildings and adding residual space.”

Located at 940 S. Claremont St., the property was once used by PG&E from the 1920s through the 1970s, said Catanzaro. Its designation as a historic resource has changed several times since PG&E left the site. In 1989, the City determined that the buildings on the property were “non-historic.” In the mid-1990s, however, that categorization was changed when the California Office of Historic Preservation in Sacramento recommended reclassifying property based off of PG&E’s former use of the site and the land’s historic employment base. In 2016, when the owner of the site was under contract to sell the property, the City of San Mateo engaged a consultant to again evaluate what development would entail for the buildings on the property. The sale of the property fell through, and according to Catanzaro, the City’s report was incomplete. The most recent uses of the buildings were for auto body shops, according to Google Maps.

“There has been no determination that the buildings are historic because of architectural features,” said Catanzaro. “It is of exclusively the historic nature it is because of the employment base of PG&E.”

Wall Street Properties submitted a pre-application for the project in July of 2018, but as the City has undertaken another historic review, the project has not moved forward. Catanzaro said that a historical consultant prepared a work scoping report in the months after the pre-application was submitted and has been reviewing the project with the City. The timeline for when the review will be completed is uncertain.

“We understood from discussions about two weeks ago that the City has received preliminaries from the consultant, but we have not been privileged to their discussions,” explained Catanzaro. “At this juncture, we just don’t know.”

If current project plans move forward, then there will be three buildings on the site. When the project is delivered, the two historic buildings would each be a single story and will include 13,760 square feet and 4,641 square feet, respectively. The new construction portion of the project will be a 45,049 square foot office building, bringing the total footprint of the development to 63,600 square feet.

However, Catanzaro anticipates that the plans will change and that the project team will be required to reduce the scope of the project’s new construction building.

“It will likely change the outlook of the added space from three levels to two above-grade,” said Catanzaro. “It will be more in-line with what current zoning permits.”

Catanzaro explained that there are often concessions allowed for development projects that involve the retention and rehabilitation of historic structures, including one that would allow for increasing the floor area ratio (FAR) of the project. Catanzaro said, however, that the City contends the concession does not apply in San Mateo.

“We’re bewildered over that conclusion,” he acknowledged.

In addition, the City has expressed concerns over how below-grade parking could impact the site’s historic resources, prompting the development team to re-evaluate how it will approach parking on the site. Initially, a single level of below-grade parking was planned.

Wall Street Properties will take an additional couple of months to update its plans in response to the recommendations and findings of the historical study, assuming the City’s historic review comes back in the near future. Wall Street Properties will then submit a formal application for the project, at which point Catanzaro estimates that the remaining approvals process will take an additional 13 to 15 months.

Once completed, Catanzaro believes that the development will be a great addition to the San Mateo business community. Close to downtown and within walking distance of two Caltrain lines, the project will serve smaller-scale, local businesses.

“If the project moves forward as designed, it will be adding much-needed incubator space,” said Catanzaro. “It is designed to accommodate several smaller tenants rather than single tenants occupying the entire site. The historic buildings will be preserved and they will have very open air, high ceilings which we think will be extremely attractive to a variety of tenants.”

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