445 S. B Street445 S. B Street
Mixed-Use Affordable Housing Development Mixed-Use Affordable Housing Development “Bespoke” “Bespoke”
City Council Public HearingCity Council Public Hearing
May 18, 2026May 18, 2026
Christina Horrisberger, Assistant City Manager
Rachel Horst, Housing and Neighborhood Services Manager 1 2
BESPOKE
PROJECT
Location
Background
Development Agreement
Project Description
Entitlements
State Law
Local Policies
Traffic Analysis
CEQA
Public Notice
Recommendation
Project Site
Caltrain Downtown
Station
Kiku Crossing
3 • Site Address: 445 S. B Street
• 50,600 sq. ft. (1.16 Acre)
• General Plan: Downtown Retail Core
• Zoning: Central Business District, Residential Overlay District (CBD/R) Project Site
BESPOKE
PROJECT
Location
Background
Development Agreement
Project Description
Entitlements
State Law
Local Policies
Traffic Analysis
CEQA
Public Notice
Recommendation
4 City-Owned Site and “Public-Private Partnership”
• Jan 2021 – Surplus Land Declaration and Notice of Surplus Lands Availability
• Oct 2021 -- Selection of Prometheus Real Estate Group/Harvest Properties and Alta Housing to develop “Talbot’s Site” (in conjunction with adjacent parcels)
• Sep-Oct 2022 – Community meeting and Planning Commission study session on potential project
• May 2023 and Sep 2024 – City Council study sessions and refinement of project deal terms
• Sep 2024-present – Revision of deal terms and drafting of complex legal agreements
At a glance:
• Exclusive Negotiation period from Oct 2021 to July 2026 (4 extensions) • Multiparty negotiation with City as both property owner and partner (and regulatory authority)
• Commercial/office and affordable housing mixed-use proposal maximizes affordable housing on City site (71 units)
BESPOKE
PROJECT
Location
Background
Development Agreement
Project Description
Entitlements
State Law
Local Policies
Traffic Analysis
CEQA
Public Notice
Recommendation
5 Project Agreements and Assurances
• Phased construction on shared podium
• Affordable housing depends on garage completion and
public financing (incl. tax credits)
• Shared need for certainty of affordable housing,
regulatory environment, and other development
conditions
Some Key Terms:
• Ground lease for residential development
• City loan $3M to affordable housing
• Commercial Developer builds parking garage/podium
• Commercial Developer $2.9M contribution to affordable housing (for predevelopment costs)
• Other project assurances include $3M deposit, $3.5M
additional deposit, and $100k/year deposit until building permit of garage (4 years/$400k) from Commercial Developer • Schedule of Performance – binding milestones with “buffers”
BESPOKE
PROJECT
Location
Background
Development Agreement
Project Description
Entitlements
State Law
Local Policies
Traffic Analysis
CEQA
Public Notice
Recommendation
6 Development Agreement
• Adopted via ordinance
• Agreement between City, Developer Team, and
owner of property leased by the Commercial
Developer for the Project
• Provides assurance that Project can be built as
entitled subject only to laws, policies, and
regulations in place on effective date
• Maximum term is 14.5 years with extension for
“force majeure” events
BESPOKE
PROJECT
Location
Background
Development Agreement
Project Description
Entitlements
State Law
Local Policies
Traffic Analysis
CEQA
Public Notice
Recommendation
7 Disposition and Development
Agreement
• Contains the terms and conditions under which
the Development Team will build the project
• Contains other key agreements (e.g., Ground
Lease, Reciprocal Easement Agremeent, Lot Tie
Agreement, Loan Agreements) as exhibits
• Allows for development of project across
multiple parcels under separate ownership
• Contains Schedule of Performance
BESPOKE
PROJECT
Location
Background
Development Agreement
Project Description
Entitlements
State Law
Local Policies
Traffic Analysis
CEQA
Public Notice
Recommendation
8 • A 71-unit seven-story 100-percent affordable housing building, with nonprofit ground floor space;
• A six-story office building with ground floor retail; • Improvements in the public right-of-way, and
• Underground parking garage spanning both parcels for 137 parking spaces
• 37 residential parking and 100 commercial parking
• 25 commercial spaces will be available for residential use, and another 37 for public during after hours
BESPOKE
PROJECT
Location
Background
Development Agreement
Project Description
Entitlements
State Law
Local Policies
Traffic Analysis
CEQA
Public Notice
Recommendation
9 • 71 affordable units:
• 3 studio units
• 24 one-bedroom units
• 22 two-bedroom units
• 22 three-bedroom units
• 5,964 square feet of ground floor space for Self-Help for the Elderly
BESPOKE
PROJECT
Location
Background
Development Agreement
Project Description
Entitlements
State Law
Local Policies
Traffic Analysis
CEQA
Public Notice
Recommendation
10 Mixed-use Office Building
• 162,926 square feet total floor area
• 148,939 square feet of office
• 13,995 square feet of ground floor retail
BESPOKE
PROJECT
Location
Background
Development Agreement
Project Description
Entitlements
State Law
Local Policies
Traffic Analysis
CEQA
Public Notice
Recommendation
13 • Disposition and Development Agreement
• Development Agreement & Ordinance
• Site Plan and Architectural Review (SPAR)
• Mixed-Use Development
• Exemption of requirements for on-site loading
• Site Development Planning Application (SDPA)
• Removal of Heritage Trees
• Special Use Permit (SUP)
• Ground floor community service/non-profit use
BESPOKE
PROJECT
Location
Background
Development Agreement
Project Description
Entitlements
State Law
Local Policies
Traffic Analysis
CEQA
Public Notice
Recommendation
14 State Density Bonus Law
• 100% affordable project at Lower-Income
category
• 22% increased density (From 58 units base
density to 71 units)
• Concessions
• Floor area bonus for residential and
commercial
• Reduced open space area
Waivers
• Street wall limitation exemption
• Increased bulk dimension above 55 ft.
• Increased building height
• Reduced setbacks
• Reduced minimum unit floor area
• Reduced Street-wall setbacks
BESPOKE
PROJECT
Location
Background
Development Agreement
Project Description
Entitlements
State Law
Local Policies
Traffic Analysis
CEQA
Public Notice
Recommendation
15 • General Plan 2030
• Downtown Area Plan
• Zoning Code
• City’s Below Market Rate (Inclusionary) Program
• Citywide Pedestrian Master Plan
• Bicycle Master Plan
• Transportation Impact Analysis
BESPOKE
PROJECT
Location
Background
Development Agreement
Project Description
Entitlements
State Law
Local Policies
Traffic Analysis
CEQA
Public Notice
Recommendation
Transportation Analysis
• Vehicles Miles Traveled (VMT)
• Project within one-half mile of a major transit stop
• Less than Significant Impact for CEQA
• City’s Transportation Analysis Guidelines
• Pedestrian improvements
• No impacts on traffic operations
16 California Environmental Quality Act (CEQA)
Initial Study and Mitigated Negative Declaration (IS/MND) has been prepared
• Public review and comment period October 4 – November 4, 2024 • Received 10 public comments
• No comment required further analysis or resulted in the identification of new or worse impacts
• Less than significant impact with Mitigation Measures 17 California Environmental Quality Act (CEQA) –
Mitigation Measures
• Monitor during tree removal for nesting raptors and migratory birds; • Preparation of a Site Management Plan (SMP) and Health and Safety Plan (HSP) to San Mateo County Environmental Health Department;
• Measures to reduce potential impacts to surface waters from contaminated groundwater in the site vicinity.
• Noise control features for project’s mechanical equipment; • Submittal of a Noise Control Plan;
• Cultural sensitivity training;
• Limitation on hours, operation, of construction and grading activities; • Archeologist consultation and coordination with Native American organization(s) in the event of the discovery of archaeological or tribal cultural resources; and • Consultation and coordination with the San Mateo County Coroner and the Native American Heritage Commission (NAHC), in the event of the discovery of human remains. 18 Public Comments
• Public noticing: 20 days in advance of the hearing (April 8, 2026):
• Newspaper Notice
• Notice to property owners/occupants within 1,000 ft. of project site • All interested parties
• City’s “Notify Me” email list
•Public comments received during the review of this project included in report
19 Planning Commission Meeting
• Public Hearing on April 28, 2026.
• Public comments expressed support for the new affordable housing that would be built and that the project was using union labor; and comments also expressed concern that labor agreements had not been reached with all trades and that the project could create traffic and circulation impacts around the neighborhood and along 5th Avenue. • Commissioners expressed support for the affordable housing and the Project’s architectural design, with concerns about the significant amount of time that would be needed before the Project was built and occupied.
• Commission voted unanimously (5-0) to recommend approval. 20 1. Introduce an Ordinance approving a Development Agreement (DA) associated with the construction a new mixed-use development totaling 239,628 square feet and consisting of one seven-story, 76,072 square-foot affordable housing building and one six-story, 162,926 square-foot office/commercial building located at 445 South B Street (“Project”).
2. Adopt a Resolution approving a Disposition and Development Agreement (“DDA”) for the Project, including a form of Ground Lease, Reciprocal Easement Agreement, Temporary Construction Easement, and Predevelopment and Permanent Loan Documents (Loan Agreement, Deed of Trust, Promissory Note, Financing Regulatory Agreement), and authorizing the City Manager to execute all documents and make any appropriate changes, with the concurrence of the City Attorney, so long as the changes do not alter substantive rights and obligations of the City.
3. Adopt a Resolution appropriating two million nine hundred thousand dollars ($2,900,000) into the Bespoke Predevelopment Project from a Developer Equity Contribution held by the City and provided to the Residential Developer in the form of a Predevelopment Loan.
4. Adopt a Resolution appropriating three million dollars ($3,000,000) in the form of a loan to support the affordable housing construction, with two million dollars ($2,000,000) from the Low Moderate Income Housing Asset Fund (Fund 255) and One Million Dollars ($1,000,000) from the Commercial Linkage Fee Fund (Fund 270) to the Housing Bespoke Project to fund the loan.
5. Adopt a Resolution to approve the Site Plan and Architectural Review (“SPAR”), Special Use Permit (“SUP”), and Site Development Planning Application (“SDPA”) for the Project and to adopt a Mitigated Negative Declaration and Mitigation Monitoring and Reporting Program (“MMRP”) in compliance with the California Environmental Quality Act (“CEQA”), based on the Findings for Approval and subject to the Conditions of Approval for the Project.
Recommendation
Thank You