After months of waiting for more details on two high-profile, mixed-use projects just north of the new 49ers stadium, we finally got some details on Friday.
Developer Related California disclosed in broad terms what it’s thinking about for a 230-acre chunk of city-owned land that’s currently a golf course and BMX track. And the Joe Montana-fronted Montana Property Group, along with new partner Lowe Enterprises, also shared the latest details on its proposal.
About 36 hours after our first story hit the Web, here are a few more takeaways now that I’ve had some time to sleep on things. What stands out to you? Let us know on Twitter, with an email or in the comments section below.
1: Not much housing — for now. As envisioned, the first phase of Related California’s proposal, an 80-acre parcel dubbed City Place Santa Clara, would include a little more than 500 units of housing. That is less than the 830 or so units (rental and condo) at Federal Realty’s fantastically successful Santana Row in San Jose, even though that project is about half the size (42 acres).
Why? It comes down to land-use guidelines, Related California President Bill Witte told me. Most of the golf course is on landfill, and state regulators are reluctant to let housing rise on it. So far, Related is considering placing its residential component on land closest to the neighboring Montana/Lowe development, which is not landfill. Still, the developer would like to see more, and is considering ways to make that happen. Especially because having on-site residents helps inject a built-in source of life into the center on nights and weekends. Stay tuned.
2: Is there enough demand for this much retail? Probably. Related’s Phase 1 includes about a million square feet of retail — a term that includes entertainment uses, such as cinemas. This begs the question: In a world where e-commerce is changing the retail landscape as we speak, are there enough tenants in the market for such a project?
Garrick Brown, Cassidy Turley’s Northern California research director, says he thinks there is.
“The national guys are looking all over the nation and see the Bay Area being the No. 1 market for growth,” he said. “As long as they’re not already down the street, they’ll want to be there.”
Still, with many once-dominant users downsizing their space requirements or expansion plans, you can expect a lot of that growth to come from one category: Food.
“You can expect food and service, for at least the next decade, to be dominant,” Brown said.
3: Related has a lot of office on the back end — a lot. Related’s Phase 1 includes about 350,000 square feet of office at City Place. Beyond that is a ton more: Two corporate campus sites are envisioned both north and northeast of City Place. Related would not build it on spec — it would be built “in response to the market,” Witte told me last week. But it is being proposed as a boatload of Class A office hits the market in Santa Clara, especially thanks to the Irvine Company.
“It’s a very different environment compared to the majority of office that’s in the pipeline,” Witte countered, when I noted there’s a lot of office coming online. “This is part of something different because of the immediate proximity with our (proposed) hotel and shopping district.”
4: Montana/Lowe also adds office. The addition of Lowe Enterprises wasn’t the only change for the 9.5-acre location, sandwiched between the stadium and the Related site, that the Montana Group is eyeing. Also on tap in the latest proposal is about 430,000 square feet of office. The addition to the earlier proposed hotel and restaurant/retail space “is an evolution of the process,” Lowe’s Hanns Lee told me. “It creates a critical mass for daytime use.”
Still, I can’t help but wonder if we’ve got plenty of office on the boards already for this area.
5: Montana Group’s project still alive. If there was one message officials with the Montana Group were seeking to broadcast on Friday, it was this: Momentum. That’s because the development group had not been able to come to terms with the city on its exclusive negotiating agreement as quickly as hoped. The addition of Lowe Enterprises makes a lot of sense. The firm brings huge resources to the table, especially in the form of its hospitality division. Indeed, the Lowe approach — developing, owning and operating its own upscale boutique hotel — simplifies things by negating the need to go out and land the right hotel flag.
6: Pay attention to the “Tasman East Focus Area.” That’s a collection of industrial buildings along Tasman Drive between Lafayette Street and the Guadalupe River, immediately east of the Montana/Lowe and Related sites. The 45-acre industrial area, owned by multiple landlords, converts to allowable high-density residential (with some commercial use) in 2015.
As the Related and Lowe/Montana projects progress — and even if they don’t — this could be a hot area for developers. (Think of how hot the warehouse area around the planned Milpitas BART station has been for residential builders, and you get an idea of what I’m thinking.) Indeed, we hear that certain folks, perhaps including Related, are talking to landowners out there for potential redevelopment plays.
7: Keep an eye on next steps. Related is seeking the City Council’s blessing to continue moving forward with the master-planning and environmental process at the council’s Oct. 30 meeting. If any hackles are going to be raised, from residents or council members, we’ll probably find out then. One issue the city must solve is what to do with the existing golf course and BMX track, both of which have their own constituencies