DATE: July 20, 2026
TO: Mayor and Members of the City Council
VIA: Stefan Chatwin, City Manager
FROM: Sofia Mangalam, Deputy City Manager
Ken Hira, Consultant Kosmont Companies
DEPARTMENT: City Manager
SUBJECT: UPDATE #2 ON REAL ESTATE ECONOMIC MARKET ANALYSIS
RECOMMENDATION
It is recommended that the City Council, by Minute Order, receive and accept Update #2 on the Real Estate Economic Market Analysis and provide direction to staff and the consultant team to prepare the final Real Estate Economic Market Analysis, refining the analysis and developing implementation action items.
EXECUTIVE SUMMARY
The City of Foster City initiated a Real Estate Economic Market Analysis (“Study”) to provide the City with a clear, data-driven understanding of current and emerging real estate and economic conditions in response to changing market dynamics, evolving demographic trends, and long-term development pressures. The scope of the Study includes five (5) main components, including:
Citywide Real Estate Economic Market Assessment
Population and Psychographic Analysis
Identify Future Economic Development Needs
City Council Engagement and Review Process
Stakeholder and Community Engagement
For this purpose, the City entered into an agreement with Kosmont Companies (Kosmont) to conduct the Study. Kosmont is required to provide in person updates at City Council
meetings to present progress findings and gain Council feedback at key stages of the Study. Prior to this meeting, Kosmont presented twice to the City Council, including on February 10, 2026, at the City Council retreat, where Kosmont presented a brief overview of the Study’s scope and methodology. Then, on April 20, 2026, Kosmont presented Update #1, including the Citywide Real Estate Economic Market Assessment and Population and Psychographic Analysis.
Update #2 summarizes stakeholder and community feedback received to date and presents the opportunity sites identified through City Council direction, stakeholder input, and community input.
BACKGROUND
On September 22, 2025, staff issued a Request for Proposals (RFP) to qualified consultants to conduct an independent professional Real Estate Economic Market Analysis to assess market trends and cycles, demographic trends, supply and demand dynamics, economic indicators, evaluate future needs, and provide strong baseline data that will be used to inform actionable strategies to guide sustainable growth and economic development.
On February 2, 2026, the City Council approved an agreement with Kosmont to conduct an independent, professional Real Estate Economic Market Analysis. Subsequently, on February 10, 2026, during the City Council retreat, Ken Hira, President of Kosmont, presented a brief overview of the Study’s scope and methodology, followed by questions from Council members. In March, the consultant team held one-on-one meetings with individual Council members to further understand Council priorities and their vision for the Study. The consultant team then began its data collection and review of the City’s real estate sectors using a variety of sources and analytical tools.
On April 20, 2026, Kosmont presented Update #1, which included population and psychographic analysis, an evaluation of the City’s economic base, an assessment of office, industrial/flex (R&D), retail, and hotel market conditions, and an analysis of visitation patterns and retail spending leakage. Following this presentation to the City Council, staff and the consultant team began an extensive stakeholder and community engagement process, including community meetings, stakeholder meetings, and community surveys. Based on stakeholder, community, and Council feedback, Kosmont compiled a list of opportunity sites and evaluated them for their potential for development, redevelopment, or repurposing based on market conditions and community priorities.
ANALYSIS
As noted earlier, Update #2 provides an overview of the extensive stakeholder and community feedback received to date and reviews the list of opportunity sites identified through City Council direction, stakeholder input, and community input.
Kosmont’s approach to preparing this Update #2 included the following tasks:
Review of planning documents, together with a tour of the City and its business and residential districts
Interviews with City staff and Council members
Assessment of local demographic and market conditions In- person and virtual community outreach meetings to present preliminary findings and gain insights into community needs and challenges Interviews with stakeholders
Identification of long-term commercial opportunities supported by market forces Review of major retail centers outside the City (e.g., Bridgepointe and Hillsdale centers)
Assessment of regional economic trends
Evaluation of key opportunity sites, adjacent uses and potential new uses Identification of necessary action items to support implementation
COMMUNITY AND STAKEHOLDER ENGAGEMENT
Community and stakeholder engagement is a critical component of the Study to ensure that the analysis and recommendations reflect the needs and priorities of residents, businesses, and the City’s daytime population.
Fig 1. Role of Community Engagement in the Study
The engagement process began shortly after Update #1 to the City Council on April 20, 2026. To reach a broad cross-section of the community, outreach materials, including the survey, workshop information, project webpage, and flyers were distributed through multiple channels. These efforts included:
More than 10,000 community members were reached via the City’s email newsletter, with strong engagement indicated by a 27% open rate (the industry average is 20-30%)
More than 21,000 community members were reached via Facebook and Instagram
Social content generated 70 engagements (likes, shares, link clicks) across platforms
Direct personal emails to business and economic development stakeholders Outreach through Parks and Recreation Department and Citizens Sustainability Advisory Committee (CSAC) channels
Flyers posted at community facilities and public locations throughout town Direct coordination with Foster City Chamber of Commerce Pop-up events at Off the Grid
A-frames placed at the Library, Off the Grid events and Levee Flyers distributed to individual businesses in shopping centers City marquee
Recology flyer
In April and May 2026, stakeholder and community feedback was gathered through numerous engagement opportunities, detailed below. For details on the specific meetings and community feedback, refer to Attachment #1.
In-person Community Meeting
On April 27, 2026, an in-person community meeting was held at the Council Chambers. There were 34 attendees. Staff provided an overview of the Study and its purpose, followed by a presentation on Update #1 that Kosmont presented to the City Council. This included citywide real estate economic market assessment and population and psychographic analysis. Attendees asked a variety of questions and also provided comments/suggestions.
Virtual Community Meeting
A second community meeting was held virtually on May 14, 2026, and was attended by 15 community members. Staff also received positive feedback on the outreach format.
Small Business Focus Group Meetings
The consultant team held four (4) Focus Group Meetings for small businesses, including on:
One (1) in-person meeting on April 27, 2026
Three (3) virtual meetings on April 29, May 04, and May 8, 2026 Participation in the small business focus groups was limited, with only a handful of business owners attending.
Stakeholder Focus Group Meetings
Thomas Jirovsky from Kosmont held 17 stakeholder meetings in the month of April and May 2026 with several stakeholders, including members of the Planning Commission, small business owners, large employers (such as Gilead, Visa), commercial property owners, the Foster City Chamber of Commerce, real estate brokers, property manager, and other stakeholders.
Community Survey
The Community Survey was an important tool for gathering feedback and understanding the needs of Foster City residents and daytime workforce. The survey asked residents and workers about their use of Foster City’s commercial areas, the retail and dining trends they want, their priorities for improving shopping districts, and the types of businesses they feel are most needed. It also gathered open‑ended feedback on broader issues such as downtown development, dining options, mobility, community spaces, and local retail vitality. The survey was open from April 22 through May 22, 2026, and 134 responses were received. The survey reflected an engaged and thoughtful community offering specific and constructive ideas.
Fig 2. Community outreach and public participation for the Study The consultant team then evaluated the community feedback and prepared a list of major community engagement themes.
Activate the waterfront and lagoon
Need for better public transportation
Concern about vacant office space
Concern about vacant spaces at OSH and Edgewater Place Need for more community events / gathering spaces
Lack of dining, nightlife, shopping and services in the City and opportunity to create a “Downtown Core”
Enhance the use of Mariners Point Golf Course
Local high school
City Council direction, together with stakeholders and community feedback, was consolidated to identify the most common themes and opportunity sites for further evaluation. While every comment, idea, and suggestion was carefully considered, the opportunity sites and themes identified for Update #2 represent the recurring priorities and shared interests that emerged through the engagement process.
OPPORTUNITY SITES
Based on City Council direction and stakeholder and community feedback, Kosmont evaluated the following properties for development, redevelopment, and/or revitalization potential:
1. Vacant parcel at the corner of Metro Center Blvd and Shell Blvd.
2. 1010 Metro Center (former OSH)
3. 1065 Hillsdale Century Plaza
4. 388 Vintage Park (former El Torito restaurant)
5. Mariner’s Point Golf Center
6. State Lands
7. Edgewater Place Shopping Center
8. Sea Cloud II
9. 1601 Beach Park Blvd.
10. 700 Lincoln Center
Attachment 1 includes the preliminary findings and recommendations from Kosmont on these opportunity sites. A summary of key highlights from the report is included below.
1. Vacant parcel
Assessment: In 2021, the owner obtained City approval for a hotel, but as a result of the pandemic, they were unable to get a financing commitment. o Hospitality demand has declined throughout the peninsula, challenging any near-term development opportunities.
Development Potential: Given the need for housing outlined in the Housing Element, and the adjacent residential developments, Kosmont believes the highest and best near-term use for this site is likely a high-density residential project, with some limited ground floor commercial use due to the substantial cost of acquisition.
Interim Opportunity: The site could be used as interim Food Truck Park or Container Village.
2. 1010 Metro Center (former OSH)
Assessment: Kosmont believes the property is a prime commercial development site due to its location at the intersection of Foster City Blvd., Metro Center Blvd. and the Hwy 92 interchange.
Development Potential: The site could accommodate 20,000-square-foot food hall and approximately 200 residential units or be developed as 100% retail.
3. 1065 Hillsdale Blvd. (Century Plaza)
Assessment: The conversion of existing office buildings into residential or mixed- use development has emerged as an increasingly important adaptive reuse strategy, particularly in areas experiencing changing office market conditions and continued housing demand due to the region’s housing shortage. Kosmont envisions the broader area- including the new Community Center, Leo J Ryan, Foster Square, Civic Center, Century Plaza, Parkside Towers and Metro Center- as an “Integrated Downtown Village” as laid out in the General Plan. The vision for the “Downtown Village”, is to strengthen connections among civic, recreational, residential, commercial and community destination. Development Potential: The site is well-positioned for evaluating adaptive reuse of the existing building for residential purposes and would support the City’s efforts to advance its Regional Housing Needs Allocation (“RHNA”) goals. Many architectural firms specialize in converting office buildings into residential uses. Additional Considerations: Adaptive reuse could accommodate a ground-floor childcare facility to help address regional needs.
4. 388 Vintage Park Dr (former El Torito restaurant)
Assessment: The site is well located amidst a major concentration of retail (Bridgepointe, Home Depot etc.), two (2) hotels, and employment uses with easy access from residential area along the Vintage Park Drive entrance to Gilead campus, within walking distance for several thousand employees. Recommendation: Kosmont believes this site is well suited for a 20,000 – 30,000- square-foot food hall/entertainment concept.
5. Mariner’s Point Golf Center
Kosmont recommends upgrading the golf course and driving range facility to add commercial food service uses taking advantage of the Bay views. In order to accommodate the extra parking needed, there was a discussion regarding state- owned parcel between the main and auxiliary driveways that could potentially be developed without wetlands concerns, though it would require trading with the State.
Development Potential: Potential expansion opportunities at the property include adding more parking and building a new clubhouse with a deck overlooking the
Bay to accommodate larger functions beyond the current 40-person capacity limit.
Implementation Consideration:
Work with State to obtain lease/easement to allow public parking on the State-owned land to the east of the Mariner’s Island Blvd. entranceway.
Alternatively, the northern extension of Lakeside Drive across 3rd Ave could provide parking opportunity near the driving range. Commercial development would require bringing in a professional operator through an RFP process.
Retain an architect to design potential expansion concepts.
6. State-Owned Land
Assessment: Caltrans has a long history of transferring, relinquishing, or selling land to cities when the property is no longer needed for state highway purposes.
These actions often support redevelopment, housing, civic centers, and transportation improvements.
Opportunity: Caltrans indicated it was holding the vacant property for potential mitigation purposes during discussions related to sites inventory for Housing Element. Kosmont suggests the City find an alternative mitigation site that could potentially be exchanged with Caltrans.
7. Edgewater Place Shopping Center
Assessment: Kosmont believes there are several opportunities to be examined for Edgewater Place.
Development Potential:
Given its size, breadth of uses and waterfront location (with boat docks), center could be a “downtown village” for Foster City residents. Kosmont has identified Edgewater Place as a possible downtown village as part of downtown core feasibility.
The center requires substantial landscape, hardscape, open space and building facade improvements to create an appealing / walkable ambience. The center may be too large to stay 100% commercial. To improve economic feasibility, the City could consider allowing a modest amount of medium density housing as a buffer to the south.
8. Sea Cloud II
Assessment: Given the need for additional sports fields and recreation facilities in the City, Kosmont believes the site could be utilized for more sports fields, tennis and pickleball courts, and potentially a public swimming pool, thereby freeing up land adjacent to the Community Center.
Implementation Consideration: Environmental assessment/remediation may be needed to permit active sports and assess the site’s ecological constraints and recreational potential, as well as its suitability for future dredge disposal from the Foster City Lagoon, which is scheduled for upcoming maintenance.
9. 1601 Beach Park Blvd.
Development Potential: Given the Housing Element designation as a housing site, Kosmont believes there is limited market opportunity for mixed-use with 5,000 SF of neighborhood commercial and up to 20 townhomes. Townhome development is the most appropriate use as it helps the City meet its RHNA by adding moderate-density housing in infill areas. Townhomes represent a more attainable homeownership option compared with single-family homes.
Townhomes increase housing supply without high-rise development, maintaining neighborhood character.
Townhome densities typically range from 14–20 dwelling units per acre, aligning well with the physical characteristics and size of the site.
10. 700 Lincoln Center Dr.
Assessment: Kosmont interviewed the property owner BioMed Realty and found that they have invested significant resources to design and entitle a new mid-rise R&D research building to complete the Lincoln Centre campus. BioMed sees strong demand for additional R&D tenancy.
Recommendation: Given the significant investment the ownership has made in the Lincoln Center campus, Kosmont does not believe the City should consider retail/entertainment uses on the site.
The evaluation of opportunity sites is an initial assessment. It is recommended that City conduct outreach to the property owners for sites that Council is interested in seeking new development. If ownership has interest, further due diligence will be required to evaluate site-specific considerations, including planning and regulatory requirements, entitlement processes, infrastructure capacity, environmental constraints etc.
In addition to evaluating the physical opportunity sites, the consultant also researched and assessed other areas/themes per City Council’s direction and included their findings/recommendations. A brief overview is included below:
Impact of Noise Ordinance: Decibel Restrictions Permitted continuous noise levels differ by time of day. For one- or two-family residential zones, sounds should generally not exceed 60 dBA between 7:30 a.m. and 10:00 p.m., and 50 dBA between 10:00 p.m. and 7:30 a.m.
Kosmont suggests the City consider modifying the nighttime 50 dBA limit to allow later evening activity on weekends. Alternative strategy could also include installing plexiglass barriers on outdoor patios directly across from homes on the Lagoon.
Impact of Redevelopment of Hillsdale Mall and Bridgepointe Shopping Center:
The San Mateo Housing Element currently lists Bridgepointe as an opportunity site for 300+ housing units, but there are legal issues related to the 1997 contract and economics make redevelopment infeasible in
near term. Owner has submitted plans to redevelop the ice rink site as general retail.
Hillsdale Mall includes a $1 billion redevelopment plan to add 1,670 housing units, 8- to 10-story office buildings and remove a portion of the interior mall that will reduce retail competition and increase retail demand. The planned redevelopment of Hillsdale Shopping Center could have mixed implications for Foster City.
The proposed reduction in traditional enclosed-mall retail space may lessen direct competition for certain regional retail tenants, potentially creating opportunities for Foster City to attract businesses seeking locations on the Peninsula.
At the same time, the addition of approximately 1,670 housing units and new office development would increase the surrounding customer and employee base, which could generate additional demand for retail, dining, personal services, and entertainment uses throughout the broader trade area, including Foster City. The increased number of residents and workers could generate additional demand for regional-serving anchors such as Costco and Safeway in Foster City.
However, the redevelopment may also reinforce Hillsdale’s role as a major mixed-use regional destination. New housing and office use, combined with its established retail, dining, and entertainment offerings and direct access to Highway 101 and Caltrain, could strengthen the center’s overall market position and continue to be significant competition for destination-oriented retailers, restaurants, and entertainment operators.
Feasibility of a High School:
Land constraints in Foster City — No large enough developable parcels remain to accommodate a high school.
Financial constraints — Could require $200M+ capital cost. Enrollment constraints — Declining regional school-age population. Governance constraints — San Mateo Union High School District (SMUHSD) control; no guarantee of Foster City district formation.
Creating Downtown Core:
Kosmont suggested the following two (2) options for creating a downtown core or downtown village:
Leo J Ryan Park, home of the new Community Center, and the numerous activities centered around the Lagoon area is a potential foundation for a Downtown Core, as most City community events already occur here. Edgewater Place Shopping Center could be reimagined as a downtown village as it is most the accessible commercial center and is adjacent to the waterfront.
NEXT STEPS
Following City Council’s discussion and direction on Update #2, Kosmont will prepare the final Real Estate Economic Market Analysis by refining the data further and developing action items for implementation. The staff and consultant team will return to the City Council for review and consideration, tentatively in September 2026.
California Environmental Quality Act
This action is exempt from review under the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15061(b)(3) (general rule for projects that have no direct or reasonably foreseeably indirect physical change to the environment).
FISCAL IMPACT
There is no fiscal impact associated with receiving Update #2 as the agreement with Kosmont has already been approved and appropriated by the City Council.
CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA
Smart Planning, Development, and the Local Economy
ATTACHMENTS:
Attachment 1 - Draft Update #2 Real Estate Economic Market Analysis