Huge Project Planned for Peninsula
- San Francisco Business Times January 29, 2001
- Lizette Wilson
Hoping to cash in on high Peninsula rents and impending transit improvements, the Martin Group and Regis Homes of Northern California have purchased a former Navy base in San Bruno for a $200 million mixed-use project.
The developers have bought the 20-acre base at El Camino Real -- sandwiched between Highways 101 and 280 -- and plan to build 300,000 square feet of office space, 210 multi-family homes, 190 senior housing units and 500 hotel rooms, plus additional retail and commercial space. San Bruno officials approved the development earlier this month.
The development is significant for the working-class town -- known better for its proximity to the SFO airport than Class A office space and booming industry -- but not particularly surprising.
Land in the northern Peninsula -- the tired-looking stretch from Daly City to Millbrae -- is about 25 percent cheaper than pricey mid-Peninsula areas like San Mateo and Redwood City, and will soon have a priceless addition: BART. BART's laying another 7.4 miles of track to build four new stations at South San Francisco, San Bruno, SFO Airport and Millbrae.
While new stations are noteworthy anywhere in the Bay Area, the expansion project is particularly important because the Millbrae station will connect with Caltrain. This means public transit riders can flow freely between SFO, the South Bay, San Francisco and the East Bay.
The $1.5 billion BART project is slated for completion in 2002, around the same time The Martin Group and Sares-Regis Group plan to break ground. Foster City-based Regis Homes, of Sares-Regis Group, is known for its residential developments, including Metro Center in Foster City and Humboldt Square in San Mateo.
TheMartin Group, which also developed One Market Street in San Francisco, Midpoint Technology Park in Redwood City, and Hamilton Air Base in Novato, specializes in mixed-use and infill developments.
The development, located at the corner of El Camino Real and Interstate 380, has easy access to the Peninsula's main thoroughfares and is one block from BART and two blocks from Caltrain.
San Bruno Mayor Larry Franzella is eager to see the area revamped and says he expects the Tanforan shopping mall -- located across El Camino Real -- to go through similar revitalization once a lawsuit with BART is resolved.
The Navy site development is expected to add as much as $4 million in annual revenues to city coffers -- boosting San Bruno's annual budget by more than 10 percent. San Bruno will use the extra cash to revitalize the old downtown area, build a new library and finance some deferred street and sewer maintenance.
Although demand for housing and hotel space is likely to remain high, the 300,000 square feet of offices is riskier. While rents remain high and vacancies low in the Peninsula, the market has cooled. In addition, with big new developments to come at Pacific Shores, Sierra Point and across Daly City and South San Francisco, some area brokers point out there's a risk the market's being overbuilt now.
Lizette Wilson covers the Peninsula for the San Francisco Business Times.