By Meghan Hall
A dated San Mateo office park is gearing up for a transformation, one that would mean replacing several of the campus’ 50-year-old buildings with for-sale townhomes. According to a planning application submitted in June of this year, Harvest Properties intends to demolish part of the existing Peninsula Office Park and construct 291 townhomes in their place. The goal, said Preston O’Connell, partner at Harvest Properties, was to pursue a development opportunity that would not only provide much needed starter housing to the area, but would fit in with the existing neighborhood context.
“When we originally acquired the property, there were six buildings, and we were trying to determine what the best pathway forward would be for repositioning the asset,” explained O’Connell. “Some of these buildings are almost 50 years old and nearing the end of their functional life. While the office market is incredibly strong, we felt like we had two primary options…We could increase office density. Or, we have a unique situation where we can retain some of the buildings as office and then reposition the balance as low-density housing, which reflects the character of the area.”
Harvest Properties purchased the campus park in July of 2018 along with Atlanta, Ga.-based Invesco Real Estate. The pair of firms acquired the property from Hudson Pacific Properties to the tune of $210 million before credits, prorations and closing costs.
Harvest Properties’ preliminary proposal would demolish four of the existing office buildings, and the townhomes would be arranged on a northern and southern parcel. The units would consist of two- to three-bedroom units and would rise between three and four stories in height. 10 percent of the units would also be designated for lower income households.
Attached garages are also part of the project plans, as are six pocket parks, which would be open to the public. Proposed open space would cover 41 percent of the 15-acre site and include amenities such as a dog park, playground, communal garden viewpoint overlooks, picnic areas and flexible green spaces. Lined walkways will link the development to other neighborhoods in the immediate vicinity.
“We thought this would be a lot more palatable to the surrounding community,” said O’Connell.
The decision to pursue residential not only sprung from the surrounding character of the neighborhood, but from the site’s original zoning designation. When the office park was built, the property’s zoning was residential along with the rest of the neighborhood.
“We’re surrounded by residential on pretty much every side, and that is actually because almost 50 years ago, when the campus was developed, it was originally zoned for residential,” said O’Connell. “It was converted to office zoning, and now what we’re proposing is to convert it back to what was originally intended.”
Additionally, Harvest Properties found that the opportunity to provide for-sale starter homes is increasingly rare in a housing market where high-density apartments reign supreme and large, centrally-located parcels are rare.
“If you look at the surrounding neighborhood, it’s all for sale,” said O’Connell. “When we looked at the housing stock, there have been a lot of apartments built this cycle, but there has been almost zero for-sale housing built, especially in entry-level homebuying opportunities. And it’s not just expensive, but there just isn’t enough product. When we bought the property, we looked around the community and asked, ‘If you’re working with area median price and you wanted two bedrooms or more, what options do you have?’ Ten. In a population of 125,000 people.”
The project will not just provide needed housing stock, but it will decrease the bulk and scale of the buildings, allowing them to blend in more with the surrounding neighborhood. And, pursuing residential on the site as opposed to high-density office could lead to lighter traffic through the area.
“The office buildings that are there right now are pretty massive, so you have a big block of massing up on the hillside that you can see from anywhere in the community,” said O’Connell. “What we liked was that the massing is going to come way down and be a lot more broken up and articulated. That will allow us to create a lot more space. Right now, it is a classic 1970s office development: all concrete, no trees, big buildings.”
O’Connell said that Harvest Properties is looking to secure the appropriate entitlements and permits over the next several years, but for now the company is looking forward to refining its proposal based on both City and community feedback. While initial feedback has been positive, the City of San Mateo has yet to schedule a Planning Commission Study Session.
“We want to make sure everyone in the community can be heard,” said O’Connell. “We really view what we submitted as a starting point of discussion with the community and the City, and we’re open to modifying the plans while still making sure that it is a viable project.”