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San Francisco Business Times

August 29, 2008

Huge Bay Meadows Project Nearly Out Of The Gate

By Sarah Thailing

After the last day of racing on Aug. 17, the only thing scheduled to run at Bay Meadows racetrack in San Mateo were the bulldozers tearing down the grandstands. In their place will rise one of the largest urban infill redevelopments on the Peninsula, a project that developer Wilson Meany Sullivan has been betting on for years.

On an 83-acre site, Bay Meadows II is designed to echo the villages that sprang up along the Peninsula nearly 100 years ago, but with a 21st century style and sustainability. City leaders wanted a pedestrian-friendly neighborhood of residential, office, retail and commercial spaces, all within walking or biking distance of its gateway Caltrain express station.

“This project is a flagship transit-oriented development for the city,” said Darcy Forsell, senior planner managing the project for the city of San Mateo. “It has the right densities, the right pedestrian connections and the right mixture of shops and services to get people to stay on site instead of having to drive.”

When complete, the 18-block community is expected to include approximately 1,200 homes, 800,000 square feet of offices near the Hillsdale train station and 92,000 square feet of retail space.

The project’s fan club includes Peninsula housing advocates and environmentalists. In 2005, the Sierra Club highlighted the project as one of 12 examples of smart development in a national report called “Building Better: A Guide to America’s Best New Development Projects.”

But Friends of Bay Meadows, a San Mateo citizens’ group that has long fought to save the 73-year-old racetrack where Seabiscuit once ran, has sued to contest an addendum to the project’s environmental impact report. A hearing to dismiss the lawsuit was scheduled for Aug. 25.

“We’re certainly not giving up,” said Linda Schinkel, coordinator for Friends of Bay Meadows.

Timing is Key

After six years of opposition, the suit is no surprise to Chris Meany, a managing partner at WMS, who said it is “highly unlikely” to stop construction.

“Bay Meadows is exactly the kind of new neighborhood we so desperately need in California,” Meany said. “We need a new kind of community, places where people can live close to their jobs in an amenity-rich environment with parks, schools and a denser form of housing. And yet entrenched no-growthers in California are just determined to block anything that’s good for the environment.”

Meany thinks the vast majority of the community will welcome the project as it is built in phases over the next seven to 10 years. The city has approved the first site plan and architectural review application covering most of the project, and approvals for two remaining applications are expected by November.

Today WMS has the green light to begin demolition, which it expects to be complete by the end of 2008. Once the site is clear, the developer will start building infrastructure, including roads, utilities and parks. WMS could break ground on the first buildings by late 2009 or early 2010, with occupancy starting in mid-2011.

Timing may be on the developer’s side. By 2011, the mortgage meltdown may be over and there may be years of pent-up demand, making it a relatively good time to release a balance of office and housing.

The development, owned by affiliates of Stockbridge Real Estate Funds and backed by institutional investors, has “all the capital it needs to execute its business plan,” Meany said. WMS plans to develop the offices itself, while selling the residential land to home builders, entering into joint venture partnerships or, if necessary, developing the homes on its own. WMS has had in-depth discussions with 26 home builders, and while many have been affected by the housing downturn, Meany believes they will remain interested in Bay Meadows II because of the under-supply of desirable Peninsula housing.

San Mateo County is likely to face a shortfall of 35,000 to 49,000 housing units by 2025, according to a study completed by the county in 2006. With its combination of flats, townhomes and detached homes, Bay Meadows II is a step in the right direction, said Chris Mohr, executive director of the Housing Leadership Council of San Mateo County. Ten percent of the project’s housing units will be affordable to moderate-income residents. In addition, WMS will give the city an acre of land where it can build up to 60 units of affordable housing.

“Bay Meadows II will be a showcase development highlighting what can be achieved to bring together people, places, jobs, housing and transit,” Mohr said.

Space for large office tenants

Meanwhile, Cornish & Carey is marketing the office space, which is 26 minutes by express train to downtown San Francisco. “We think this represents the best location for a larger campus user on the Peninsula, where there aren’t that many opportunities to do 500,000 square feet,” Meany said.

In September, architectural firm HOK will begin design development for the five blocks of contemporary offices lining Delaware Street. The four-story buildings will sit atop podium parking, which will be hidden behind shops, restaurants, courtyards and arcades lining the street. Trees will overhang wide sidewalks, creating a streetscape reflecting the scale of traditional neighborhoods down the Peninsula.

Sustainability was a guiding principle for the entire project, said Paul Woolford, senior vice president and director of design for HOK. Like the historic Shell and Russ buildings in San Francisco, the offices will be clad partly in terra cotta tile in a palate of cream, ocher and earthy red. The tile will act as thermal insulation, reducing heat gain on the south and west faces of the buildings, while the other two sides – visible to train riders – will be covered in glass and metal.

Unlike a traditional Silicon Valley R&D campus surrounded by a sea of parking, Bay Meadows should appeal to the under-40 crowd who like to walk or bike to work, or take Caltrain.

“Expectations are different for the younger generation,” Woolford said. “When they get to their job, they want to have amenities, like a coffee bar, gym, bookstore or park. We’re at a seminal change.”

Read the original story here.