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: 5 Section Name: PUBLIC HEARING Account Number: 26-3111 File ID: 26-10912 TO: City Council
FROM: Alex Khojikian, City Manager
PREPARED BY: Community Development Department
MEETING DATE: March 02, 2026
SUBJECT:
668 E. 3rd Avenue, New Multi-Family Residential Development (PA-2025-025) — Approval RECOMMENDATION:
Adopt a Resolution to approve the Site Plan and Architectural Review (SPAR), and Site Development Planning Application (SDPA) for construction of a new multi-family residential building with 128 units and associated site improvements at 668 East 3rd Avenue, and find that the Project is Statutorily Exempt from the California Environmental Quality Act (CEQA) pursuant to Assembly Bill 130, based on the findings for approval and subject to the conditions of approval.
BACKGROUND:
On April 2, 2025, Prometheus Real Estate Group (applicant) submitted a Planning Application (PA-2025-025) to demolish the existing one-story commercial shopping center known as Gateway Crossing (13,650 square feet) and construct a new multifamily residential building (“Project”). The proposed residential building will be eight stories tall, with one level of below grade parking (73 spaces), be approximately 169,750 square feet in size and include 128 residential units. Of the 128 residential units, 20 are proposed to be provided as below market rate (BMR) affordable housing units (10 at the very low- income affordability level and 10 at the moderate-income affordability level). The proposed unit mix includes studio, one bedroom, two-bedroom and three-bedroom units. This application follows the submittal of a Preliminary Application (PA2024-065) made under the Housing Crisis Act (Senate Bill 330) which was submitted on November 13, 2024. A Neighborhood Informational Meeting was held by the applicant on March 19, 2025.
On February 10, 2026, the Planning Commission held a public hearing to consider the Project. Following public comments and deliberation, the Planning Commission voted unanimously (4-0 with one commissioner recused) to recommend that the City Council approve the project. The Commission included a recommendation to provide flexibility for the applicant to propose a more colorful decorative tile at the project entry feature. The Council may wish to consider this recommendation and update the project conditions accordingly as part of their action. The applicant noted that they are supportive of having additional flexibility regarding the tile color.
This project requires approval by the City Council in accordance with SMMC Section 27.06.050(d), as the Project exceeds the height limit in the General Plan. The Project site has a General Plan Land Use Designation of Mixed-Use Medium II, which allows buildings up to six stories. The proposed Project has a height of eight stories and is utilizing a State Density Bonus waiver to exceed this General Plan standard, discussed in further detail below.
Project Site
The Project site is located at 668 East 3rd Avenue, bounded by South Eldorado Street on the east, East 3rd Avenue on the north, and South Delaware Street on the west. The site is 0.64 acres (28,387 square feet) in size, has a General Plan Land Use designation of Mixed-Use Medium II, and is zoned CBD/S (Central Business District Support). The site is also within the Downtown Area Plan Gateway Sub-Area. The existing site is developed with a one-story 13,650 square-foot commercial
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building with surface parking. Adjacent uses include a gas station and office/commercial buildings on the same block just south of the Project site, the four-story Metropolitan Apartments complex across South Eldorado Street to the east, a currently vacant lot with an approved entitlement for a six-story mixed-use building across South Delaware Street (known as “Block 21”) to the west, and a two-story commercial building and gas station/car wash across East 3rd Avenue to the north. The downtown San Mateo Caltrain stop is approximately 0.3 miles walking distance from the site to the northwest. A location map showing the Project site is included as Attachment 2.
Project Description
The Project includes an eight-story multi-family residential building with 128 residential units and 73 off-street covered parking stalls. Of the total 128 units, 20 units are provided as Below Market Rate (BMR) affordable units (10 of which will be provided at the very-low income affordability level, and the other 10 will be at the moderate-income affordability level). The unit mix is shown in Table 1 below. The BMR units are distributed throughout each story of the building.
Table 1 - Proposed Units
Unit Type BMR Units
(Very-Low)
BMR Units
(Moderate)
Market Rate
Units
Total
Units
Studio 0 1 0 1
Urban 1-bed1 4 2 46 52
1-bed 3 4 30 37
2-bed 2 3 28 33
3-bed2 1 0 4 5
Total Units 10 10 108 128
The main pedestrian and street access to the building is at the corner of South Delaware St. and East 3rd Avenue, with pedestrian access to the townhouses along East 3rd Avenue. The parking garage is three levels, with 43 stalls below-grade, 12 on the ground floor, and 18 on the second story. Bicycle parking facilities include 140 long-term secured bicycle storage racks located within the parking areas, and exterior bike racks to accommodate the required 10 short-term bicycle parking spaces are provided along South Delaware Street. The Project proposes a variety of residential amenities, including a fitness room with a sauna and strength studio, dog washing area, amenity deck on the third floor, and a common room and amenity deck with a barbeque area on the eighth floor.
The building design and context are discussed further below. Project plans showing the proposed site plan, floor plans, elevations, and architectural renderings are included as Attachment 3.
APPLICABLE CODE AND POLICY REVIEW:
General Plan and Zoning Code
The General Plan 2040 Land Use Designation for the Project site is Mixed Use Medium II, which allows for medium-density mixed-use buildings that provide a mix of commercial, office, and/or residential uses within the same site or building. This Land Use Designation allows for a mix of uses near other mixed-use, commercial, or residential areas, and within Downtown.
The Mixed-Use Medium II designation allows for residential densities of up to 99 dwelling units per acre. For this 0.64-acre site, the base density allows up to 64 units. (The calculation of 63.36 units is rounded up to 64 units in accordance with State housing law requiring fractional units be rounded up to the nearest whole number). To achieve the total of 128 units, which is double the maximum density, the applicant is requesting a density bonus under State law, which is further discussed below. A list of applicable General Plan policies, and discussion of how the Project is consistent with these policies is included in the Resolution (Attachment 1).
The Project site is zoned Central Business District Support (CBD/S), which is subject to development standards outlined in San Mateo Municipal Code (“SMMC”) Chapter 27.39. The CBD/S district allows for a variety of uses (both commercial and 1 “Urban 1-bed” are designed to be a type of studio unit, with a partial wall separating the living and sleeping areas. Since the separation is not a full wall, this is not counted as a bedroom.
2 Of the five 3-bedroom units, one is a 3-bedroom apartment unit with one level, and the other four are the 3-bedroom “townhome” style units, which have two levels of living area and are accessible by l at the ground level. The one very-low income 3-bed BMR unit is a townhome style unit.
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residential) and is intended to encourage opportunities for businesses that support the downtown core, and residential uses to support housing opportunities close to the downtown. A Project Data Table listing the applicable Zoning Code standards and the Project’s conformance to them Is included as Attachment 4. As noted in the table, where there is an inconsistency between the Zoning Code and the General Plan 2040, the General Plan shall control (per Government Code Section 65860(c)(2)(B) and SMMC Section 27.02.220). Additionally, the applicant has not requested any concessions, but is seeking waivers to certain development standards in accordance with State Density Bonus Law (Government Code Section 65915).
These waivers are discussed in greater detail below.
Parking Standards
The Project is located within the City’s Central Parking Improvement District, which was established to set specific parking regulations for projects located within the Downtown Specific Plan Area. However, the site is also located within 0.5-miles of the Downtown San Mateo Caltrain station, which is a major transit stop. Pursuant to Government Code Section 65863.2 (AB 2097), the Project is not subject to minimum parking requirements or parking in-lieu fees. Despite the fact that no parking is required, the proposed Project does include 73 off-street parking stalls for the residents.
Downtown Area Plan
The Project site is located within the Downtown Plan Area, in the Gateway Sub-Area. The Downtown Area Plan, adopted in 2009, provides a vision for Downtown San Mateo that is pedestrian-friendly and serves as a focal point of the community, including a blend of historical buildings and new development, with retail, entertainment, and housing opportunities. The Gateway Sub-Area serves as the primary entry point to Downtown from U.S. Highway 101. The vision of the Gateway Sub- Area includes an emphasis on multi-family residential uses, with design guidelines aimed at promoting new development that is compatible with existing neighborhoods. The Downtown and Gateway design guidelines have been adapted to enforceable objective standards reflected in the City’s Multifamily and Residential Mixed-Use Objective Design Standards (ODS), discussed further below.
Site Plan and Architectural Review (SPAR)
The Project requires a Site Plan and Architectural Review (SPAR) approval for construction of a new building in accordance with SMMC Section 27.08.030. Staff have reviewed the Project for compliance with the Objective Design Standards and worked with the applicant to revise portions of the design for greater compatibility with these standards and the surrounding neighborhood context. Detailed findings for approval of the SPAR are included in the Resolution (Attachment 1).
Site Development Planning Application (SDPA)
The Project requires a Site Development Planning Application (SDPA) for removal of major vegetation in conjunction with the redevelopment. The Project is exempt from the SDPA requirements related to grading activities per SMMC Section
23.40.030(d)(1), as the excavations below finished grade proposed for this Project are for building footings and a basement level parking structure within the footprint of the building. “Major vegetation” is defined as live vegetation consisting of tree growth with a trunk diameter of six inches or greater measured at 54-inches above natural grade. Additionally, the Municipal Code defines a “Protected Tree” as any heritage tree or street tree. Heritage trees include any oak tree with a minimum diameter of 10 inches measured at 54-inches above natural grade, as well as any other tree species with a minimum diameter of 15 inches measured at 54-inches above natural grade.
On the Project site there are a total of nine existing trees, four of which qualify as protected trees. As a part of the Project plans, all of the existing trees are proposed to be removed. Per SMMC Section 27.71, the Project is required to provide the equivalent landscape unit (LU) value of the removed trees, either by planting new trees, paying an in-lieu fee, or providing some combination of both new tree planting and in-lieu fee payment. The Project proposes to plant 16 new trees along the Project frontages, and will pay an in-lieu fee into the City’s Tree Planting Fund for the difference between the loss of LU value and tree replacement credit. Additional details on the SDPA findings for approval are included in the Resolution (Attachment 1)
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APPLICABLE HOUSING LAWS:
State Density Bonus Law
The Project utilizes the provisions of State Density Bonus Law in accordance with Government Code Section 65915 and as locally adopted in SMMC Chapter 27.15 Density Bonus. To comply with Density Bonus regulations, the City must allow for increased residential density, reduced parking standards, and “concessions” and “waivers” from development standards for residential projects that provide a certain percentage of units as affordable units.
The Project site’s General Plan Land Use Designation of Mixed-Use Medium II, with a density of 99 units per acre, allows for a base of 64 units. The Project includes 15 percent (10 units) at the very low-income level, and another 15 percent (10 units) at the moderate-income level. Pursuant to AB 1287 (Government Code Section 65915(v)), a project can receive a 50 percent density bonus when 15 percent of the units are proposed at very low-income levels and another 50 percent density bonus when an additional 15 percent moderate rate units are added. This would afford the Project a “stacked” density bonus of up to 100 percent, which allows for a maximum of 128 units.
Concession and Waiver Requests
For this Project, State Density Bonus Law also allows the applicant to request up to three concessions and unlimited waivers from development standards. Generally speaking, a concession (or incentive) is a reduction or modification of a development standard that results in identifiable or actual cost reductions to provide for affordable housing costs, helping to make the Project financially feasible. (A concession also includes a reduction in site development standards or a modification of zoning code requirements that exceed minimum building standards, as specified.) A waiver is a modification of a standard that would otherwise physically preclude the construction of the Project at the allowed density. The Project application does not identify any concession requests under State Density Bonus Law. However, the Project is seeking several waivers for aspects of the Project that do not meet various City development standards. The applicant has also included a summary of the Project waivers in a density bonus request letter (Attachment 5), as well as waiver diagrams on Sheets G010 and G011 of the Project plans (Attachment 3). A complete list of the Project waivers is included in Attachment 1, Exhibit B.
Staff have evaluated the waivers and concluded that the waivers identified are necessary to allow construction of the Project at the densities permitted under the City’s General Plan and State Density Bonus Law.
Other Applicable State Laws
In addition to State Density Bonus Law, there are several other State Laws that regulate housing development projects. For this Project, these include, but are not necessarily limited to the following:
The Housing Crisis Act (Senate Bill 330)
oUnder Senate Bill 330 (SB 330), the Project vests the ordinances, policies, and standards adopted and in effect when a preliminary application was submitted to the City. This Project submitted a Preliminary Application under SB 330 on November 13, 2024, and is therefore vested to the ordinances, policies, and standards in place as of this date.
The Housing Accountability Act (HAA)
oThe HAA limits a local agency’s ability to deny, reduce the density of, or render housing development projects infeasible if objective standards are met. As proposed, this Project meets all applicable objective standards in the General Plan, Zoning Code, and other local policy documents that were in effect at the time the preliminary application was submitted under SB330.
Assembly Bill 130
oAssembly Bill 130 (AB 130) was signed into law and became effective immediately on June 20, 2025. AB130 included numerous changes related to housing laws, including the addition of a new statutory exemption from the California Environmental Quality Act (CEQA) for housing development projects on sites under 20 acres that meet specific qualifying criteria. In addition to the CEQA exemption, AB130 requires the Project to be processed on an expedited timeline.
Inclusionary Housing Requirements
The City’s Below Market Rate (Inclusionary) Program requires rental projects of 11 or more units to provide a minimum of 15 percent of the proposed units to be designated low-income units. The applicant proposes to designate 10 units (15
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percent of the base density) as affordable at the very low-income level, which meets the City’s Inclusionary Program requirements. These affordable units are required to be distributed throughout the development, have access to all on-site amenities, generally be of comparable size to similar market rate units, and have an exterior design and appearance compatible with similar market rate units.
DESIGN REVIEW – OBJECTIVE DESIGN STANDARDS:
The Project was reviewed for consistency with the City’s Multi-family and Residential Mixed-Use Objective Design Standards (ODS). The Project’s architectural style includes influences of Mediterranean and Spanish Revival styles, expressed in a contemporary manner. Features such as arches and decorative tiles around the entryway, balconies, pergolas in open space areas, as well as materials such as stucco, metal railings, and terra-cotta roof tiles are incorporated into the design, which also features more modern window openings and massing.
The building is eight stories in height, which is considered a high-rise building per the City’s ODS. The Project includes a parking structure, with one basement level and parking integrated into the building on the first two levels. The parking area is fully enclosed, with one garage entry from South Eldorado Street proposed. The frontage includes public open space with landscape planters and a seating bench incorporated into the design, as well as ground-level residential entries for four townhome units along East 3rd Avenue, contributing to a pedestrian-friendly environment at the street level. The structure’s massing follows the rule of thirds, with three primary horizontal elements, as well as a distinct base, body, and top to provide vertical massing breaks. The Project also requests several waivers from the ODS, specifically related to blank walls, and standards derived from the Downtown Plan Area and Vision of the Gateway related to façade design, residential entries, massing and articulation, setbacks, step backs, height, and architectural styles and materials.
TRANSPORTATION ANALYSIS:
The Project is exempt from Vehicle Miles Travelled (VMT) analysis pursuant to AB 130, which establishes a statutory exemption for qualifying infill projects from the California Environmental Quality Act (CEQA). The Project’s eligibility under this exemption is discussed further below.
The project was reviewed by staff, consistent with the General Plan, for compliance with the City’s Local Transportation Analysis Guidelines to address potential impacts to traffic operations. Trip generation data was provided by the applicant and peer reviewed by staff. The existing land use, including the convenience store and restaurants on site generates an estimated 124 trips in the AM peak hour, whereas the proposed residential creates an estimated 47 trips in the AM peak hour. For the PM peak hour, the existing land uses generate an estimated 140 trips, whereas the proposed residential use is estimated to generate only 50 trips5 . Therefore, based on the difference between the existing and proposed land uses, the project will result in a net decrease in both AM and PM peak hour trips. Based on this analysis, the project is not expected to have significant impacts to local traffic operations.
The initial Project submittal included two driveway entrances, one on South Delaware Street and another on South Eldorado Street. In accordance with Zoning Code Section 27.64.025, new driveway access on arterial streets is prohibited unless no other means of access is available. Therefore, the Project was redesigned to adjust the vehicular access to one driveway off of South Eldorado Street, which is a local street.
NOTICE PROVIDED:
All meeting noticing requirements were met. The Project was noticed per Section 27.08.050 of the Zoning Code, with mailed notices sent to owners and residents within 1,000 feet of the Project site, and City placards posted on the Project site 10 days prior to the public hearing. In addition to the required noticing, public hearing information for the Project was included in an issue of the bi-weekly Planning E-newsletter circulated prior to the hearing date.
PUBLIC COMMENTS:
The applicant held a formal Neighborhood Informational Meeting on March 19, 2025, which was attended by approximately 40 participants. The discussion and comments at the Neighborhood Informational Meeting included clarifying questions 5 Trip generation rates estimated from ITE 11th Edition.
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about the Project, which were answered by the developer, as well as public comments about parking adequacy, traffic and construction impacts, and the loss of existing businesses/retail. During the formal application review, no additional public comments were received by staff.
Two written public comment letters were provided ahead of the February 10, 2026 Planning Commission public hearing, including a letter from the California Housing Defense Fund (CalHDF) noting the City’s obligation to follow applicable State housing laws, and a letter in support of the additional housing units and project design from a local business owner (Attachment 7). During the Planning Commission meeting, four speakers provided verbal comment, with one commentor submitting a written copy of their comments as well, included in Attachment 7. Comments in support of the project emphasized the need for more housing (specifically affordable units in the downtown area) and expressed support for the Project design and architecture. Comments raising concerns about the Project focused on impacts to traffic - specifically cyclist and pedestrian safety and parking impacts, noting that this project is one of many new and proposed developments adding density to the greater downtown area. Other concerns included loss of the existing commercial retail shopping center on the Project site, and timelines for construction. One additional written comment was provided following the Planning Commission meeting, included in Attachment 7, voicing similar support for the project design, some aesthetic recommendations, and concerns about the reduced setbacks, pedestrian safety, and emergency vehicle access. Any public comments received after the publication of this report will be forwarded to the City Council for review and consideration and posted to this item on the City’s Agendas & Minutes Public Meeting Portal as “Post Packet Public Comments”.
BUDGET IMPACT:
As a new housing project filed under SB 330, the Project would be subject to several impact and in-lieu fees in effect at the time of the application filing date, including the ones listed below, which are assessed and collected prior to the issuance of building permits or occupancy7:
Child Care Development Fee of approximately $432,000 to offset the impact on the need for future childcare space needs by new development
Park Impact Fee of approximately $2.37 million to offset the increased demands on park and recreation facilities serving new developments.
Wastewater Capacity Charge of approximately $920,000 to recover a proportionate share of costs for existing and future wastewater system facilities and assets from new or expanded connections to City wastewater systems. School Impact Fees, charged at $4.94 per sq. ft. of residential area, to offset the increased demands on school facilities caused by new development. This is collected by the San Mateo Union High School District for all schools in San Mateo.
Landscape Unit In-Lieu Fee of approximately $11,750, which is assessed for each Landscape Unit value not physically planted on-site or along street frontages.
Public Art Fee in the amount of 1.19% of the total building valuation (excluding land acquisition and off-site improvement cost) unless sufficient public art is provided onsite. Transportation Improvement Fee of approximately $479,000 to fund citywide traffic improvements.
ENVIRONMENTAL DETERMINATION:
In accordance with the California Environmental Quality Act (CEQA), the Project meets the criteria to be statutorily exempt from further environmental review pursuant to Public Resources Code Section 21080.66. This exemption was enacted as a part of Assembly Bill 130 (AB130), effective as of June 30, 2025. The applicant has provided a memo detailing the Project’s qualification under AB130, included as Attachment 6. Staff have reviewed the eligibility criteria and determined that the Project meets the qualifying criteria under AB 130.
In accordance with Public Resources Code Section 21080.66(b)(1)(A), the City formally noticed Native American tribes for consultation regarding the Project and its potential impacts on tribal cultural resources. One tribe responded to the City’s notice to request consultation. The Project Conditions of Approval (Attachment 1, Exhibit A) include conditions required to 7 The fees provided are estimates only. Actual fees paid may be higher or lower based on any permissible fee increase at the time of fee collection or credits the Project may be eligible for.
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satisfy requirements of AB 130 to avoid impacts to tribal cultural resources. In addition, consistent with Public Resources Code 21080.66(c), the Project Conditions of Approval include a requirement for the applicant to complete a phase I environmental assessment, and to mitigate any hazards as required per the statute.
ATTACHMENTS
Att 1 – Proposed Resolution
Exhibit A – Conditions of Approval
Exhibit B – Summary of Project Waivers
Att 2 – Location Map
Att 3 – Project Plans
Att 4 – Factual Data Sheet
Att 5 – Density Bonus Request Letter
Att 6 – Applicant’s AB130 CEQA Exemption Memo
Att 7 – Public Comments
STAFF CONTACT
Elizabeth Gagliardi, Associate Planner
[email protected]
(650) 522-7206