Bay Meadows spurs big demand

Bay Meadows is proceeding with its second phase. When complete, the project will bring 1,200 housing units and 90,000 square feet of retail space.

Courtesy of Wilson Meany

Bay Meadows is proceeding with its second phase. When complete, the project will bring 1,200 housing units and 90,000 square feet of retail space.

Even though the plan to redevelop the historic Bay Meadows racetrack into a mixed-use neighborhood has been in the works for decades, its basic bullet points still pack a punch: 83 blank-slate acres; adjacent to one the region’s blue chip mass transit systems, Caltrain; and smack-dab between the job powerhouses of San Francisco and Silicon Valley. When complete, the neighborhood will be one of California’s largest transit-oriented developments.

All of this made it even more important that developers got the San Mateo project’s second phase — the one with the bulk of residential and office development — right.

The market’s response is one vote of confidence. Demand for the project’s first units has been so strong, builders are using a lottery system to satisfy demand. Activity on the shovel-ready office component also has been brisk.

“It’s a vision we believed in strongly, and if you talk to the homebuyers out there, people are really excited to be part of the community,” said Janice Thacher, a partner with developerWilson Meany. “It’s more than just buying a house. They really believe in what we’re doing.”

What they’re doing didn’t happen overnight, and comes with plenty of twists and turns.

An epic, seven-year entitlement process culminated in the 2008 approval to tear down the longtime Bay Meadows horse racetrack and build roughly 1,200 housing units, 750,000 square feet of office and 90,000 square feet of retail there.

But that coincided with the economic catastrophe, putting plans for speedy vertical construction on hold. Wilson Meany and its partner, Stockbridge Capital, held on. Infrastructure work started in 2010. As it happened, that put the project in an enviable position when the economy started on its recovery.

“At the depth of (the) recession, we were building those so we’d have finished land pads when the market was back,” Thacher said. “It was a strategic business decision.”

The city of San Mateo also stands to gain: On tap are utility enhancements and additional tax revenues.

For instance, city estimates peg annual property taxes at full build-out in 2025 at about $1.5 million – up from $167,000 during the racetrack’s final year of operation. Additional tax revenue from other sources related to Bay Meadows will double that haul.

“We think the project has spurred a lot of interest to live in San Mateo, as demonstrated by the housing demand for the project,” said city economic development manager Marcus Clarke.

Bay Meadows came close to landing its first office tenant — Shutterfly — earlier this year, but that tech user ended up staying put in Redwood City.

Experts say it’s only a matter of time before a user looking for a big chunk of space signs on, allowing construction to commence.

“We’ll built the office buildings when we get the tenants,” Thacher said. “It’s a matter of when the right tenant comes along.”

Bay Meadows already features a mix of uses: The Nueva School is under construction on an elite high school campus. Two city parks are built. And Wilson Meany has started work on the first apartment project, called Field House.

So far, TRI Pointe Homes and Shea Homes have bought off housing development sites.

Wilson Meany is maintaining a cautious pace for future land sales so as not to flood the market.

“We believe in the concept of a mixed-use community,” Thacher said. “People feel like this is their project.”

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s