Hang On to Your Seats!

.

…and I sure hope you’re ready for the ride. I’m not sure I am.

Last night the Council authorized an environmental impact report “…for the Alexandria Life Sciences & Technology Project at 987 Commercial Street…”

For those not recognizing the address this will be a giant commercial development spanning most of the land between Industrial Road, Old County Road, Brittan Avenue and Commercial Street. It’s basically the Kelly-Moore site and the old L3 site. The item was approved on a 4 to 1 vote, with me voting no.

It’ll be the largest single development project in San Carlos’ history, and will increase our total commercial development space by 1,000,000 square feet…which is amazing given we currently only have 1.4 million square feet1.

This project, and some others already approved, will dramatically transform San Carlos. We’ll become, in just a few years, a major biotech site, home to thousands of new jobs, many of them highly-paid. Each of those jobs will support additional jobs in turn2. The project will also fund some new community amenities and improvements. That’s a given because Alexandria wants exemptions from certain zoning regulations3.

It will also significantly increase traffic and exacerbate the problem of there not being enough housing nearby for all the people who will be working there. Besides increasing freeway congestion for all of us that condemns increasing numbers of our fellow citizens to live with horrendous commutes. Granted, they chose to do so…but surely a community calling itself the City of Good Living doesn’t aspire to a reputation of “thanks for all those wages and purchases enriching our city, now please make sure you get out of Dodge by sundown”.

In short, whatever your views on increased development are4 this is a huge deal. An unprecedented-in-our-history event. So we’re no doubt actively debating our land use and development policies to be sure they’re up to the task, right?

Wrong.

That’s not happening. Yes, we have made a start. But the study won’t be done for years, and whatever policies might come out of it will take even more time to develop and implement5.

So we are embarking on the most historic round of commercial construction in San Carlos’ history…with rules and protocols mostly defined over a decade ago. At a time when we were desperate to attract whatever development dollars might maybe come our way.

I don’t think that’s a recipe for a good outcome. Sure, we have tools allowing us to negotiate terms with developers. But are those tools and protocols consistent with today’s challenges and desires? Unlikely. And our authority to modify the rules governing a project decline dramatically once a developer has submitted a complete package for review and approval…which is going to happen Real Soon Now.

The Council itself recognized last December the significance of these developments and their likely impact on San Carlos and our region. But Covid-19 intervened and the Council has been unwilling to buy itself more time, even for a hurried review-and-update of our development policies and regulations6. Meanwhile the clock keeps ticking and developers keep moving forward. Even the economic hiatus caused by the pandemic hasn’t slowed them down. Architectural work can be done remotely, and we’re so attractive the needed financial capital is still available.

Normally I try to end these warning articles on an action-oriented note, suggesting ways people can have an impact on how their community evolves. I’ve done that repeatedly on this topic for some time now, without seeing much reaction by the community.

I hope that means everyone is okay with what’s about to happen. If not, well, maybe it’ll serve as a reminder to engage earlier on future development projects.

Here’s hoping things go well.


  1. Two million if you include the Meridian 25 project currently under construction by the freeway, also owned by Alexandria. 

  2. Economists call this the multiplier effect. Every dollar of new money injected into an economy generally translates into four or five dollars of total economic impact when you tally up all the “add on” jobs, purchases, etc., that a new development sparks. 

  3. Developers can and often do ask for such allowances, offering to pay more in fees or improving public infrastructure in exchange. The Meridian 25 project, for example, includes significant improvements to Commercial Street. Of course, such improvements enhance the area surrounding a development, increasing its value to the property owners. 

  4. I’m a supporter provided it’s done right. And a big part of doing it right is improving, or at least maintaining, the jobs/housing balance. 

  5. Maybe we can announce the completion of our efforts at the ribbon-cutting for one of these projects. Surely that would be worth a balloon or two. 

  6. I’ve asked, repeatedly, for such. 

21 thoughts on “Hang On to Your Seats!”

  1. It would be interesting to note if this will be good for school funding? Can anyone comment?

  2. Mark Olbert

    A good question, Christine. Shot answer, I think, is “yes” because it will boost property taxes, which are the primary funding source for San Carlos’ schools.

    1. Walter Alvarado

      Prop 13 caps increases at 2 percent and schools are funded through the state, so you are incorrect.

      1. Sorry, Walter, but while you’re right about the 2% annual increase cap you’re wrong in this context.

        Property is re-assessed whenever it changes hands, generally at whatever it sold for. New construction on existing property also triggers re-assessment. The property taxes on my 5 year old home are far higher than the taxes on the house I tore down to build my new home.

        Similarly, Alexandria’s property taxes are already higher because they bought the land they’ll be building on for far more than it was previously assessed (unless they did what I describe below, which I don’t think they did). When they finish construction their tax base will be higher still, reflecting the millions of dollars they invested in construction.

        BTW, there is a way for commercial property to change hands but not be re-assessed: buy the company which owns the land rather than the land itself. It’s a loophole (IMHO) which businesses do take advantage of. It’s also a loophole that will effectively be closed if the “split roll” property tax initiative gains voter approval this November. It would cause commercial property to be treated differently than residential property. Among other things it would enable re-assessment of commercial property more frequently than is currently the case.

    2. But we know how that works right? Even though we pay massive taxes currently, schools are still not getting their fair share. And there is no guarantee that they will with this project also. It’s our collective failure as a community that everyone has given up on schools because of politics. Here is your article that explains why a bigger chunk of properly taxes can’t be moved towards our schools:

      https://www.sancarlosblog.com/2008/09/09/prop-13-understanding-how-it-affects-san-carlos-schools/

      You also mentioned in another thread the other day that despite having a surplus of $38M, schools are still not city governments first priority.

      I appreciate your efforts to educate the community on these issues. I think it’s time for community to ask more questions from the rest of the council members.

      1. Megha, you win the prize for resurrecting the oldest blog article ever cited on my Council blog :)!

        I agree it’d be a good time to ask those questions, even given the caveat the city’s direct responsibilities don’t include the District schools.

        I also encourage you, and others, to ask why the District Board and management did not do more to support the idea of the city helping out the district temporarily. I’m not objecting to being sort of hung out to dry — that’s just part of politics — but it raises questions about just how the District wants to navigate the pandemic-created situation and what they are seeking to accomplish.

  3. With more jobs moving to work from home, existing properties may never fill again. Where is the demand for these spaces coming from?

    How many have applications for tenancy?

    Is this a case of build it and they will come?

  4. Mark Olbert

    Hi Gavin,

    I think, if I’m reading your comment correctly, that you’ve misunderstood the nature of the development project. It’s not a multi-family housing project. It’s a 1,000,000 square foot commercial (office) building project. So it will create demand for more housing (because it will be adding thousands of jobs to the community) but it won’t, by itself, provide any new housing capacity.

    1. Mark, I think what Gavin was asking is where will demand for office space come if more firms are allowing their employees to work from home and are moving toward that model even post-CoVid (if there is ever to be such a time).

      1. Thanx, Steve. He got back to me and corrected my misunderstanding. I think my subsequent reply addressed his questions. While building a project that’s ultimately uneconomic wouldn’t be smart for any developer to do the city can’t prevent them from doing so provided they adhere to all the relevant codes and regulations.

  5. Brent McKay

    So in short. We get increased street traffic, increased housing costs due to more competition and no where else to build new housing, increased freeway congestion, increased property costs for small business owners in the project area. Let’s not forget more pollution, more construction dust, noise, and disruption. On top of it we get maybe 10,000 more people? And for what? What do we need this for? We all moved here because things like this did not exist in San Carlos.

    Follow the money trail here and we’ll find out why. Everyone is on the take these days. Is Mark the only honest one on the council who cares about our little town? Seems so! As if that monstrosity next to the freeway wasn’t enough.

    1. Sally Biles

      I agree with Brent 100%. And I will miss our former town once described as “Little Town USA” by the (now almost defunct) SF Chron many years ago. I don’t remember EVER seeing ANY RFCs for this development. How did that happen? Where have notices about this proposed development gone out? I keep track of Next-door posts, and I read the SC newsletters, too. But this announcement makes me feel like I’ve been living under a rock! Compared to the Wheeler Plaza development, (which you couldn’t NOT hear about) and other proposed use of undeveloped land in SC, I have not heard a peep about this one, until now, and it is already approved. Where did I miss all of your requests for input? I am scratching my head. Thank you

      1. Mark Olbert

        Hi Sally & Brent,

        Sally, please remember this was authorization for doing an environmental impact report. Which is required under law for these kinds of projects and must be done before the project can be considered for approval. They take a long time for big projects so are often commissioned way ahead of time (they also allow for significant amounts of public input).

        Brent, this next is a (very) short version of a longer answer I’ve written about in multiple places (I’m happy to talk to you about it in more detail if you want to get together for coffee; just let me know).

        Private property is privately controlled. How its used can be, and is, regulated…but that’s done in general terms (“no retail stores in residential neighborhoods”) not on a property-by-property basis. Attempting to focus in like that would expose the city to legal challenge which it would almost certainly lose (i.e., it’s a settled area of law).

        In addition, having established the land use rules for an area (“commercial buildings up to 75 feet in height are allowed here”) the community cannot “discriminate” among project proposals on a case-by-case basis. Approving a project is not like buying something in a store. If the proposal meets all existing regulatory requirements it pretty much must be approved or, again, the city would be exposed to a legal challenge it would almost certainly lose, have to pay damages… and then have to accept the project anyway.

        This is not to say we can’t regulate how San Carlos evolves. We can! But we have to do it >>before<< a complete application is received. That's why I've been beating the drum on this topic for almost two years now. But either I wasn't reaching people or "most" people were okay with letting development move forward. Or maybe something else. In any event, authorizing the EIR is a sign we're pretty much out of time, at least for this particular project, to change our development rules.

  6. Sorry I did understand that.

    What is the commercial demand? Is it proven?

    Many companies are not renewing leases now.

    Many have gone out of business or changing how they do business (online)

    Are they building and spending having guarantees that they will be occupied?

    1. Mark Olbert

      Ah! Sorry, Gavin, I completely misunderstood your comment.

      You raise an interesting question which is essentially one about the law. I’ll try to answer it but please remember I’m not a lawyer. You may want to talk to Greg Rubens, our city attorney, to get a better/more complete answer.

      Generally speaking communities are limited to establishing rules on how property can be used within their borders. That’s why you don’t see retail stores, for example, popping up in the middle of residential neighborhoods. Our rules don’t allow for commercial, retail land use within residential areas (there are some limited exceptions; I’m simplifying here). It’s also why you don’t see three or four story homes in San Carlos. We have height limits, set back limits, etc., that limit how land can be used.

      But the land itself is private property not owned by the city so the community doesn’t control it. It’s limited to regulating its use (and those regulations, broadly speaking, must be reasonable).

      So while it clearly wouldn’t make economic sense for a developer to build a commercial office park only to see it sit vacant for years due to poor economic conditions, nothing in law prevents them from doing so. It’s their land and their money which they can use as they see fit, provided their project complies with our land use regulations.

      Hope this helps.

  7. Carolyn Baxter

    Where has the info been on this? I must have had my head in the sand as this is the first I have heard of it! Yikes, Mark. This really worries me. An additional 1M sq. ft.? Why do the other Council members think this is a good idea? (Hate to even ask you that question … maybe you can direct me to info regarding this project?)

    1. Mark Olbert

      Hi Carolyn,

      The issue has been building for several years (I spent most of last year as chair/mayor pushing to get attention paid to it, with some success). You can look around on my site for other articles I’ve written on the topic.

      I don’t think my colleagues think it’s necessarily a good idea particularly if nothing is done to manage/guide the effects. You can talk to them to get a better idea on where they stand.

      From my perspective the bigger “opposition” is from staff. In broad-brush terms one can look at the debate like this: some people believe our existing zoning rules and negotiating rights (which are a function of the rules we set up) are sufficient to keep the jobs/housing situation in balance. That, roughly speaking, is where staff falls. Some people believe our rules and rights aren’t up to the task and need to be updated. That’s my perspective.

  8. Sam Herzberg

    The City should do a Specific Plan for that site and the surrounding older industrial lands should be rezoned for housing. Community amenities should be part of the planning process. Could include a new High School too.

    Would like the City to acquire Sequioa Union High School District lands around Laureola Park, so that park can be expanded for greater community use.

    Would also like to see San Carlos work with Belmont on northern Highway 101 freeway access improvements at Harbor.

    I’m still waiting for the pedestrian improvements on Old County Road to be initiated by the Meridiaan 25 project to complete the undergrounding of utilities and make sidewalk improvements to the train station where prior Old County Road sidewalk improvements ran out of funding. This had been a condition of development, but no community process for participation has been initiated by the City’s Public Works Department as the development itself continues to be constructed.

  9. Sam Herzberg

    Mark,

    Thank you for the post and educating the community where the development stands.

    A Specific Plan for the area would be a good idea, and it should consider high denisty and affordable housing near the site, and a site for a new High School just like Oracle adopted D Tech.

    San Carlos should also work with the Sequioa Unified High School District to acquire lands they own around Laureola Park, so that park can be improved for community benefit.

    The Meridian 25 proejct is supposed to complete the undergrounding of utlities and sidewalk improvements on Old County Road from Commercial to the last street where improvements were made near the Train Station as required by the City Council as a condition of development. When is that project going to start and what will be Public Works process for community input? Need to improve the walkability for train and bus access for future workers.

    Sam

  10. Adam Malamy

    It would be interesting to see a rebuttal to this post from the 4 council members who voted in favor. Will such be forthcoming?

  11. Mark Olbert

    I encourage you to ask them, Adam. But you won’t see their responses here (and I’d reject any comment submitted by someone reporting on what they said) because, by law, no quorum of us can share our views on a topic within our purview outside of an agendized public meeting. That’s to ensure all interested members of the public get to see or hear all such discussions.

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