CITY OF SAN MATEO
CITY OF SAN MATEO
Agenda Report
City Hall
330 W. 20th Avenue
San Mateo CA 94403
www.cityofsanmateo.org
Agenda Number: 13 Section Name: PUBLIC HEARING Account Number: 26-3111 File ID: 25-10429 TO: City Council
FROM: Alex Khojikian, City Manager
PREPARED BY: Community Development Department
MEETING DATE: November 03, 2025
SUBJECT:
Hillsdale Mall Redevelopment Application — Informational RECOMMENDATION:
Receive an overview of the proposed project, receive public comments, and provide early feedback and direction to the applicant and staff.
BACKGROUND:
On February 6, 2025, the applicant submitted a preliminary application for a housing development project under the Housing Accountability Act (HAA) (Government Code Section 65941.1). Once deemed complete, an eligible housing development project vests in development standards, fees, and regulations as they existed at the time of submission, provided that all required documents outlined in the City’s SB 330 Preliminary Application Checklist are provided (https://www.cityofsanmateo.org/DocumentCenter/View/79071/Preliminary-Application-For-Housing- Development?bidId=) . On March 20, 2025, with the submittal of all required information, the preliminary application was deemed complete. Following submittal of the preliminary application, both the applicant and the City sought clarification from the Department of Housing and Community Development (HCD) as to whether the project qualified as a “housing development project” pursuant to the HAA. As further discussed below, the HAA confers significant procedural and substantive protections to the project applicant, and the HAA must be interpreted and implemented to support housing development.
On August 12, 2025, HCD issued a technical assistance letter stating that the project qualified as a housing development project and was subject to the HAA (Attachment 1). The City then sought further clarification from HCD on the construction timing for residential components in this multi-phased mixed-use project. In a meeting on September 25, 2025, HCD staff verbally confirmed that jurisdictions may require the information listed in the City’s application submittal checklist to ensure that both the residential and commercial components are adequately planned. In other words, the City may require phasing information and add permitting requirements to support delivery of the residential components concurrently with the non- residential components to ensure that the overall project continues to meet the criteria of a housing development project.
On June 20, 2025, the applicant submitted a formal planning application. The submission included a processing letter and consistency analysis, and a Master Development Plan set, both of which provided high-level information about the proposed project. However, the application did not include critical information, such as architectural design, building elevations, and detailed land uses and programs, even though these materials were required for the preliminary application to be deemed complete (Government Code Section 65941.1). On July 21, 2025, the City issued an incomplete letter based on the Planning Application Checklist for Non-Single-Family Projects (including SB330 applications).
On October 17, 2025, the applicant resubmitted revised plans and application materials for the second round of review.
Because this submission was received only a week and a half before agenda publication, this agenda report includes only
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high-level information from the second submittal. Staff from all reviewing departments are currently evaluating the updated application plans and documentation, with comments due by November 17, 2025.
PROJECT SITE:
The project site consists of the main Hillsdale Shopping Center, bound by 31 st Avenue to the north, El Camino Real to the east, Laurel Creek to the south, and Edison Street to the west, as well as a separate parcel consisting of a surface parking lot behind PetSmart Center on 36th Avenue, for a combined total of 32.66 acres. The shopping mall site and the surface parking lot are two separate parcels. The 12.03-acre North Block at Hillsdale Shopping Center, on the north side of 31 st Avenue, is not part of the project site and will remain as currently developed.
Proposed to be demolished as part of this project include the Hillsdale Shopping Center and associated parking structures, three commercial buildings that house Barnes & Noble, Trader Joe’s, and Wells Fargo/Citi Bank, as well as associated and standalone surface parking lots. Adjacent uses include a variety of commercial and residential uses:
North: Hillsdale North Block shopping mall
South: PetSmart and multi-family residential uses, separated from the project site by Laurel Creek West: single-family uses
East: Bay Meadow office development and single-family uses on the other side of El Camino Real and Railroad tracks.
In addition, the project site is located within ½-mile of major transit stops, which means that the project is exempt from all off-street parking requirements pursuant to AB 2097. The project site is also identified in the City’s 2023-2031 Housing Element as a housing opportunity site, with a potential capacity of 1,200 housing units.
PROJECT DESCRIPTION:
The project proposes to demolish a significant portion of the Hillsdale Mall regional shopping center (approximately 1.5- million square feet) and associated parking garage structures and subdivide the main mall site into 13 parcels through vesting tentative maps. The standalone surface parking lot at the south end of the project will remain as a separate parcel to be developed with residential uses.
Conceptually, the main site is organized into four distinct land use zones: commercial zones along El Camino Real; a retail center in the northern portion of the site, providing a connection to the North Block; a residential zone along the western edge adjacent to Edison Street; and a flexible-use zone in the middle of site, bridging the commercial and residential areas.
To be specific, four newly created lots along El Camino Real are proposed to be office buildings ranging from five to ten stories, with potential ground-level retail spaces. The retail core is situated in two central blocks as standalone retail buildings and ground-level retail in two residential buildings. Residential development is concentrated on the western side, with five to eight-story apartment buildings in the mid-site area and a three to five-story apartment building and two rows of three to four-story townhomes along Edison Street as a transition zone to adjacent single-family residential neighborhood. The two central blocks between commercial and residential zones are programed as “flexible zones”, which may be developed with residential and/or commercial uses after the application approval. The Density Bonus Letter noted that the project would designate 14% of the total housing units for lower income (15% of the rental units for lower income household, and 15% of the townhomes for moderate income).
The detailed land use information for each block was not included in the first-round submittal. A comparison of the overall land use programs between the preliminary application submittal and both formal application submittals is detailed in the table below.
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Preliminary Application Formal Application
1st Submission
Formal Application
2nd Submission
Existing Non-Residential Floor
Area to be Demolished 1,490,331 sq. ft. 1,490,331 sq. ft. 1,490,331 sq. ft.
Residential Units 1,392 units Up to 1,670 units 1,389 units1 Residential Floor Area 1,905,000 sq. ft. Up to 2,390,800 sq. ft. 2,029,508 sq. ft.2 Non-Residential Floor Area 2,059,000 sq. ft. Up to 2,056,000 sq. ft. 2,105,866 sq. ft.3 Parking 5,390 spaces No Information provided 4,963 spaces
The Cover Letter from the applicant (Attachment 2) provides more information and details about the proposed project, and a condensed version of the project plans is included as Attachment 3. Additional information about the project can be found on the City’s Current Development page (https://www.cityofsanmateo.org/4856/Hillsdale-Mall-Redevelopment---Mixed- Use).
DISCUSSION:
The Housing Accountability Act (HAA) sets processing deadlines and rigid review procedures for housing development projects. For example, the formal application is expected to be deemed complete within three cycles of review pursuant to Government Code section 65943. Otherwise, the City bears the burden to demonstrate that the incompleteness determination does not constitute an effective disapproval of the project. The HAA also prohibits jurisdictions from disapproving or conditionally approving a housing development project in a manner that renders the project infeasible, unless the project has a specific, adverse impact upon the public health and safety (Government Code Section 65589.5(d)).
Equally important, the HAA only allows a jurisdiction to apply objective, quantifiable, written development standards, conditions, and policies in a manner to facilitate and accommodate development at the density permitted on the site and proposed by the development.
Thus, the City Council’s discretionary authority is significantly limited regarding conditions and requirements that can be imposed on this project because of state housing laws regarding housing development projects. In the past, the adoption of a Specific Plan or master development plan for a project of this size and scale would be a legislative action conducted through a discretionary review process, and potentially utilizing a development agreement, allowing the Planning Commission and City Council to set specific requirements and modifications based on the community and site-specific needs, and all applicable City plans, policies, and standards.
Based on this context, staff has developed a list of high priority issues for the City Council to consider as part of this study session.
Issue 1 – Project Timeline and Phasing Plan
As currently submitted, the application does not include a timeline or phasing plan. In their original submittal, the applicant stated that the timeline is “not required in City published application checklist” and “specific phasing and sequence is expected to vary based on market conditions at the time of redevelopment to ensure Project financeability.” Based on the applicant’s Hillsdale Reimagined Website, the complete redevelopment is estimated to occur in phases over the next 20 years, which is also referenced in the applicant-held neighborhood meeting on April 29, 2025.
Staff are actively working with the applicant and consulting with HCD to ensure that the project is processed and constructed in compliance with the state law and local regulations. Absence of phasing and timeline information 1 Up to 1,670 units identified on Master Plan Document
2 Up to 2,390,800 sq.ft. identified on Master Plan Document 3 Up to 2,059,000 sq.ft. identified on Master Plan Document
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adds uncertainty given the project’s complexity and extended duration. Key technical studies, such as utility capacity analysis, water supply assessment, and traffic analysis, also depend on the project’s phasing plan.
As a housing development project, the application is subject to a tight timeline and limited to three rounds of review to determine application completeness with City requirements. Each of these review cycles starts with a 30-day City review, followed by a 90-day period for the applicant to respond to City comments. Based on three rounds of review, the project’s completeness review would finish in March 2026.
Crucially, the phasing of residential development remains unclear, and City staff are continuing to work with the applicant to help support delivery of residential components concurrently and proportionately with non- residential components consistent with the City’s BMR guidelines. As stated above, this is to ensure that the overall project delivers housing units as the commercial components are built.
After review for completeness, the City must provide written documentation identifying any inconsistencies with local regulations within 60 days of being deemed complete (Government Code Section 65589.5(j)(2)(A)(ii)). A list of policies and codes in the City’s General Plan, adopted plans and the Zoning Code that may be applicable to the project is included as Attachment 4. The applicant is expected to address all the inconsistency issues while the environmental (CEQA) analysis prepared. Following completion of the environmental review, the City must schedule public hearings to consider approval of the project.
Issue 2 – Regional Shopping Center Designation and Community Serving Commercial The Hillsdale Station Area Plan (HSAP) identifies the Hillsdale Mall as a regional retail and employment center, while also recognizing its potential for housing development opportunities (Policy LU-2.4). The HSAP anticipates that any major modification to the mall or surrounding properties would require preparation of a comprehensive master plan. When the HSAP was adopted, such a master plan was typically processed through discretionary review and adopted as a legislative action. However, this process is no longer applicable to a housing development project, unless the applicant voluntarily engages with the City in a conversation to preserve the regional retail function consistent with the Area Plan’s vision.
The proposed demolition of approximately 1.5 million square feet of existing retail and commercial space, along with associated parking, and its replacement with only ground-level retail space would represent a significant loss of regional commercial activity. Approval of the Hillsdale Mall Redevelopment project as currently proposed would leave the City with BridgePoint as the sole remaining regional retail center. However, the redevelopment of the site and added office uses will support increased property tax revenue and local jobs. To fully assess these issues, the City will be engaging an economic consultant and retail consultant to provide a comprehensive evaluation of the proposed project, including how it will impact the local economy and City revenues.
Furthermore, the project proposes to develop “up to” 1,670 new housing units (or 1,389 units as identified on the last submitted Plan Set ) which will generate substantial demand for community-serving retail and commercial services. For comparison, Bay Meadows Phase I included 734 residential units and 300,000 square feet of retail/commercial space, and Phase II included 1,048 homes and 150,000 square feet of retail/commercial space.
Although the applicant introduces a grocery store in Building E1 as part of the second-round submittal, the total amount and type of proposed retail/commercial space is still undefined. To help meet the needs of both existing and new residents, it would be ideal for the project to include sufficient space for retail and commercial service businesses to serve local needs and continue to be a regional destination. Issue 3 – Pedestrian Connection to Hillsdale Caltrain Station Since the project is exempt from parking requirements under state law, a strong connection to the Hillsdale Caltrain Station and transit along El Camino Real is critical to maximize transit use and support the viability of reduced off- street parking. Implementing a pedestrian bridge linking the station and the mall across El Camino Real would not only enhance connectivity but also improve pedestrian safety, encourage transit-oriented development, and strengthen the overall vitality of the site.
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Issue 4 – Off-Street Parking
The project proposes extensive ground-level parking for both residential and commercial buildings, rather than maximizing ground-level retail space, which could result in a suboptimal pedestrian experience along El Camino Real and the newly created internal streets. A standalone parking structure (Building C5) is also proposed in the center of this site. Because the project is located within one-half mile of Hillsdale Caltrain Station, the City cannot impose any parking requirements pursuant to AB 2097. The applicant, however, may voluntarily work with the City to locate parking strategically to maximize both the feasibility and vitality of the project. Issue 5 – Traffic and Circulation
Under SB 743 (Public Resources Code Section 21099), if a project is located within one-half mile of a major transit stop, the project may be presumed to have a less-than-significant Vehicle Mile Traveled (VMT) impact, especially for residential and office uses, unless substantial evidence shows otherwise. In other words, projects near transit can streamline traffic analysis under CEQA. However, General Plan 2040’s Circulation Element, specifically policies C 6.3 and C 6.4, require site-specific transportation impact analysis following the City’s adopted Transportation Impact Analysis (TIA) Policy for development projects. City staff is currently working with its consultant team to prepare a transportation impact analysis (TIA) to evaluate the project and what improvements will be needed to minimize any potential impacts.
Issue 6 – Site and Architectural Design Standards
The architectural design, submitted in the second-round submittal, is under staff review to evaluate its consistency with San Mateo’s Objective Design Standards. At a high level, staff will focus on the overall design quality of the tallest office buildings fronting along El Camino Real, the compatibility of the proposed residential buildings with the surrounding neighborhood, and the quality of ground-level interfaces with the public realm. Issue 7 – Environmental Review
The applicant is seeking a CEQA exemption pursuant to Section 15183, which would allow the project to tier off of a previously certified program-level Environmental Impact Report (EIR) when the project is consistent with the underlying general plan and its policies. In this case, the applicant proposes to tier from the General Plan 2040 EIR, arguing that the Hillsdale Mall Redevelopment project falls within the scope of the General Plan’s land use and development policies, thereby streamlining the environmental review process. However, if there are any site- specific impacts that require further study, the project would not be eligible for this exemption. For the proposed project, factors such as (but not limited to) water supply, utility capacity, construction traffic, noise and vibration, air quality, and proximity to Laurel Creek could indicate potential site-specific significant effects, which would require preparation of an initial study and/or EIR. The project, however, is exempt from VMT analysis and aesthetic impact review under SB 743, as it is located within one-half mile of a major transit stop.
Staff is seeking input from the City Council on the project, including but not limited to the discussion topics outlined above.
Early feedback from the Council and the public will help inform the next steps of the application process to the extent possible and will assist the applicant in further updating and refining the design of the proposed project.
ENVIRONMENTAL DETERMINATION:
This study session is not a project subject to CEQA, because it can be seen with certainty that it will not cause a physical change in the environment (Public Resources Code Section 21065). The level of environmental review required for this project is still being assessed.
NOTICE PROVIDED:
In accordance with Government Code section 65091 and the City’s Municipal Code public noticing requirements, this Study Session was noticed to the following parties at least ten (10) days in advance of the meeting:
Over 2,800 property owners, residential tenants and business tenants within 1,000 feet of the project site; The City’s “900 List” which contains nearly 100 Homeowner Associations, Neighborhood Associations, local utilities,
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media, and other organizations interested in citywide planning projects; The City’s Hillsdale Mall Redevelopment Project email subscription list; The interested parties list which includes interested individuals who contacted the City and requested to be added to the project notification list;
Twelve 18”x24” Placards placed by the applicant at each side of the project site facing the access points; and Email recipients of Citywide Planning eNews and Citywide eNews, as well as social media followers.
All public comments that have been received since notices were mailed out are included as Attachment 5. Any additional public comments submitted after agenda publication will be posted to this item on the City’s Public Meeting Portal as “Post Packet Public Comments.”
ATTACHMENTS
Att 1 – HCD Technical Assistant Letter
Att 2 – Applicant Cover Letter (2nd Submission)
Att 3 – Project Plans (2nd Submission)
Att 4 – Applicable Local Codes and Policies
Att 5 – Public Comment
STAFF CONTACT
Elaine Ling, Principal Planner
[email protected]
(650) 522-7216