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CITY OF SAN MATEO
Agenda Report
City Hall
330 W. 20th Avenue
San Mateo CA 94403
www.cityofsanmateo.org
Agenda Number: 21 Section Name: PUBLIC HEARING Account Number: File ID: 26-11343 TO:City Council
FROM:Alex Khojikian, City Manager
PREPARED BY:Community Development Department
MEETING DATE:July 20, 2026
SUBJECT:
Appeal of a Planning Commission Approval of a New Six-Story Multifamily Residential Development — Adoption RECOMMENDATION:
Adopt a Resolution to deny the appeal and uphold the Planning Commission's decision to approve a Site Plan and Architectural Review (SPAR), a Site Development Planning Application (SDPA), and a Vesting Tentative Parcel Map (VTM) for the construction of a new six-story multifamily residential building with 181 dwelling units and associated site improvements at 715/723 North San Mateo Drive, and find that the Project is exempt from further review under the California Environmental Quality Act (CEQA) pursuant to Public Resources Code section 21080.66, based on the Findings for Approval and subject to the Conditions of Approval.
BACKGROUND:
On April 15, 2025, Prometheus Real Estate Group (Applicant) submitted a Planning Application to demolish two one-story commercial buildings and one two-story duplex to construct a six-story multifamily residential building (“Project”) consisting of 181 dwelling units, parking, and open space. This application followed the submittal of a Preliminary Application (PA- 2024-064) made on November 14, 2024, under the Housing Crisis Act (Senate Bill 330) and Public Resources Code section 21080.66 (AB 130).
The Planning Commission approved the Project on March 24, 2026, by a vote of 4-0, with one commissioner absence. The public hearing included presentations by staff and the applicant, comments from three members of the public, and Commission deliberation. The Planning Commission acknowledged neighborhood parking concerns, noting limitations on requiring additional off-street parking per State law. The Commission also commended the Project for its design, including biophilic architecture, varied massing, and diverse unit sizes. The Planning Commission Agenda Report and the Resolution with Findings and Conditions of Approval adopted by the Planning Commission are included as Attachment 6. Following the Planning Commission decision, on April 2, 2026, Steve Carlson (Appellant) filed an appeal. The appeal form is included as Attachment 2. San Mateo Municipal Code (SMMC) Section 27.08.090 requires City Council action on an appeal of a Planning Commission decision. This Agenda Report provides a summary of the Project, the issues raised in the appeal, and a discussion of how the Project complies with the applicable standards and policies.
Project Site
The Project site is located west of North San Mateo Drive, with State Street on the northwest and Villa Terrace on the southeast, is comprised of four parcels, and is approximately 1.22 acres, or 53,141 square feet, in size. The existing site includes approximately 5,330 square feet of commercial floor area within two one-story buildings with surface parking along North San Mateo Drive, that is currently used for as parking for the vehicle maintenance business across the street, and one 1,960-square-foot, two-story residential duplex at 247 Villa Terrace (unit 1 is registered with the City as a short-term rental and unit 2 is occupied by a long-term tenant). Tenant relocation assistance will be provided in the form of a list of comparable housing, a relocation allowance, and payment for actual moving expenses, as specified in Condition 5 of the proposed
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resolution. Surrounding uses include single-family and multifamily residences to the southeast and southwest, auto-related businesses to the northeast, and a fitness business to the northwest. To the north, across the street from the site, is the 888 San Mateo Apartments, a three-story multifamily development completed in 2014.
The Project site, and the properties abutting North San Mateo Drive to the north and south of the site, are within the General Plan Land Use designation of Residential Medium II. The Project site and the properties along North San Mateo Drive to the north and south are also within one of the ten General Plan 2040 study areas, where the City increased allowable building height, density, and FAR. The Project site and vicinity are not within the boundary of any Specific Plan, Master Plan, or Area Plan. The Project site is zoned “Regional/Community Commercial District” (C3-2) and “Executive Offices District” (E2-1.5), and the Burlingame Caltrain stop is less than one-half mile north of the site. A location map showing the Project site is included as Attachment 3.
Project Description
The Project includes construction of a six-story, 258,018-square-foot multifamily residential building with 181 residential units and 180 off-street parking spaces. To prepare the site for development, the Project would demolish two one-story commercial buildings and a two-story duplex, remove all site paving, remove 19 existing trees (four of which are protected), and merge the four existing parcels into one parcel. The new building would include 14 dwellings on the ground floor (ten along North San Mateo Drive and four along Villa Terrace), 31 dwellings per floor on the 2nd and 6th floors, and 35 dwellings per floor on the 3rd, 4th, and 5th floors. The Below Market Rate (BMR) dwellings will be distributed throughout each floor and each story of the proposed building. The dwelling mix is shown in Table 1 below.
Table 1 - Proposed Units
Dwelling Type Very-Low Income Market Rate Total
Studio 1 8 9
Urban 1-bed1 4 33 37
1-bed 8 71 79
2-bed 6 46 52
3-bed 0 4 4
Total Dwellings 19 162 181
Primary pedestrian access would be provided along North San Mateo Drive, with secondary access provided on State Street and Villa Terrace. Parking would be provided in a two-level parking garage, with 131 stalls below grade and 49 on the ground floor, accessed via a new driveway and curb cut to Villa Terrace. Bicycle parking facilities would include secure racks within a 196-space bike-parking room at grade, located adjacent to the residential lobby, and exterior bike racks to accommodate 12 short-term bicycle parking spaces, located in the public right-of-way adjacent to the residential lobby along North San Mateo Drive. Residential amenities would be provided, to include a mail/package room, lobby, coworking space, and a dog washing area on the ground floor, a gym/fitness room, a pool/spa and courtyard on the 2 nd floor, and a common room and amenity deck with a barbeque area on the 6th floor (overall, the Project would provide approximately 27,000 square feet of open space). Within the public right-of-way fronting the site, the Project would remove six curb cuts/driveways and all curbs/sidewalks, and landscaping to install new sidewalks with pedestrian-scaled lighting, landscape planters with 25 new street trees, and new bulb-outs with ADA curb ramps at the intersection of San Mateo Drive and State Street and at San Mateo Drive and Villa Terrace, and increase the supply of on-street parking spaces by one stall to 11 spaces. The Project’s Architectural, Landscape, and Civil plans are included in Attachment 4.
APPLICABLE CODE AND POLICY REVIEW:
General Plan and Zoning Code
The General Plan 2040 Land Use Designation for the Project site is Residential Medium II, which allows medium-density multifamily residential dwellings, such as condominiums and apartments, near mixed-use, office, and/or commercial areas.
The Residential Medium II designation allows for residential densities of up to 99 dwellings per acre, and for this 1.22-acre 1 “Urban 1-bed” is a type of studio dwelling, with a partial wall separating the living and sleeping areas. Since the separation is not a full wall, the sleeping area is not counted as a bedroom, and an urban 1-bed is considered a studio dwelling for the purpose of confirming automobile and bicycle parking.
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site, the base density allows a maximum of 121 dwellings. To achieve 181 dwellings, the applicant requested a density bonus under State law, which is further discussed below. A discussion of the General Plan policies that are applicable to the Project are included in the Draft Resolution (Attachment 1).
The Project site is zoned “Regional/Community Commercial District” (C3-2) and “Executive Offices District” (E2-1.5). In both Zoning Districts, residential uses are permitted by right. Development of this site is subject to the development standards outlined in SMMC Chapters 27.34 and 27.48. A Project Data Table listing the applicable Zoning Code standards and the Project’s conformance to them is included as Attachment 5.
Housing Accountability Act
Section 65589.5(j)(1) of the Housing Accountability Act (HAA) limits a local agency’s ability to deny, reduce the density of, or render housing development projects infeasible when the project complies with applicable, objective general plan, zoning, and subdivision standards and criteria, including design review standards. This HAA limitation also applies to a project that receives waivers from objective standards under State Density Bonus Law.
If a housing development project complies with objective standards, then the local agency can only disapprove a project or require that it be developed at a lower density where it makes written findings that: (1) the project would have a “specific adverse impact” on public health or safety, and (2) there is no feasible method to satisfactorily mitigate or avoid the adverse impact. Under section Government Code 65589.5(j)(1), a “specific, adverse impact” means “a significant, quantifiable, direct, and unavoidable impact, based on objective, identified written public health or safety standards, policies, or conditions.” The Project is subject to the HAA and as proposed, it 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 SB 330.
While this appeal hearing is de novo, and thus the City Council could consider any topic and not just those raised in the appeal, the Council’s review is limited by the HAA to the Project’s compliance with applicable objective standards.
State Density Bonus Law
Project review is also subject to State Density Bonus Law, per 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, “concessions,” and “waivers” from development standards for residential projects that provide a certain percentage of units as affordable.
The Project proposes 181 dwelling units, exceeding the maximum density established for the Residential Medium II land use designation in the San Mateo General Plan 2040. The Project, however, would designate 15 percent of the base density units as BMR units at the Very Low-Income (VLI) affordability level. Per Government Code section 65915(f)(2), a project with at least 15 percent of the dwellings designated as affordable for VLI households is eligible for a density bonus of 50 percent of the base density. This density bonus would increase the maximum allowable density to 182 dwellings 2. Therefore, the density proposed by the Project is consistent with the General Plan and state law.
Concession and Waiver Requests
For this Project, State Density Bonus Law also allows the applicant to request up to three concessions, per Government Code section 65915(d)(2)(C), and unlimited waivers from development standards, per Government Code section 65915(e).
Generally speaking, a concession (or incentive) is a reduction or modification of a development standard that results in identifiable and 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.) 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 2 The General Plan density for this site is 120.7 dwellings, and per Government Code section 65915(q), the density is rounded up to 121 dwellings. The 50% bonus, when applied to this density, would allow 181.5 dwellings, and, per Government Code section 65915(q), the total number of dwellings allowed for this site is rounded up to 182.
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Project that do not meet various City development standards, such as floor area ratio (FAR), setbacks/yards, landscape buffers, and open space3. The waivers required for this Project are listed on page two of the Project Data Table in Attachment
5. Staff evaluated the applicant’s waiver requests and concluded that the waivers are consistent with State law requirements because they support construction of the Project as it is designed and at the densities permitted under the City’s General Plan and State Density Bonus Law.
APPEAL:
To prepare this Project for consideration by the Planning Commission, the Project was reviewed by the Development Review Board4 (DRB). The DRB guides development review in the City to: 1) ensure that the application materials are complete, 2) identify any inconsistencies with objective general plan and zoning standards, objective design review standards, the building code, Municipal Code, or State Law, and 3) identify general and any project-specific conditions that must be applied.
The DRB’s review of this Project involved four review cycles. While under review of the DRB, the applicant provided additional information, and the Project was revised to ensure compliance with objective standards. The Conditions of Approval adopted by the Planning Commission reflect the thorough review by the DRB, and the Conditions represent the standard of review applied to similar projects approved by the Planning Commission and the City Council.
In addition to the required compliance with the conditions of approval, the construction and operation of the building must also comply with the City’s Municipal Code. The construction of the Project is subject to the review and approval of a building permit and related City inspections during construction, to ensure that the Project is completed in a manner consistent with the Project approval and the building permit.
The appeal covers a wide range of topics. Consideration of this appeal is guided by the HAA, and review of each appeal point must be based on the objective standards that apply to this Project. For any appeal point that is not supported by an objective standard, the Council must consider if a specific adverse impact would occur and if no feasible alternative exists to avoid the adverse impact. If an appeal point is not related to an objective standard, and no specific adverse impact would occur, the Council must dismiss the appeal point.
In the section that follows, the text from the appeal is provided in italics, followed by a response provided by Staff.
1.“Notice and project description were incomplete,” and “Project Entitlements were not disclosed and/or not included” Per SMMC Section 27.08.050, the content for any required notice must include: 1) the date, time, and place of hearing, 2) the name of the applicant, 3) the purpose of the application, 4) an identification of the subject property, and 5) other facts as may be prescribed by the Planning Commission or City Council. The notice released for the March 24, 2026, Planning Commission public hearing included items 1-4. Regarding item 5, “other facts,” the Planning Commission has not prescribed additional facts that are needed for a public hearing notice. The notice released by the City for this public hearing was also prepared in compliance with SMMC section 27.08.050.
2.“the 73 page Transportation Study Attachment #7 was not made available until midday Mon. Mar. 23” It is correct that although the DRB had access to the Local Traffic Assessment (LTA) for its review, the public did not receive it until this time. The Planning Commission Agenda Report mentioned that a LTA was attached, but it was not. When the City learned of this omission, the Agenda Report was corrected to list the LTA as an attachment, the Planning Commission Agenda materials were updated, and the LTA was provided to the appellant, in advance of the March 24 Planning Commission meeting. The LTA is included as Attachment 8. 3 Within the applicant’s density bonus request letter, “Building height” is listed as a waiver or reduction. However, with the adoption of Measure T, the General Plan 2040 Land Use Designation for this site permits building height of up to 6 stories. As the Project would include only 6 stories, the Project complies with the City’s height limit, and this waiver is not needed.
4 Per SMMC section 27.04.147, the DRB is a staff-level review board composed of representatives from the Building and Planning Divisions of the Department of Community Development, the Department of Public Works, the Fire Department, the Police Department, and the Department of Parks and Recreation.
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3.“Staff Report provided limited data and analysis of neighborhood concerns (notably on-street parking, location of garage entry/exit, location of pool spa and outdoor cooking and dining and outdoor lounge, traffic, energy impacts to adjacent residences, project generated noise, off-site glare, odors and ambient lighting levels, construction effects including grading and excavation and duration especially on adjacent school and assisted living facilities, quality of fit with the neighborhood, life safety issues related to the blind intersection of the garage exit and pedestrian sidewalk, decreased safety of Highland Bike Blvd, users, life safety of the excavation and construction of a large retaining wall adjacent to residences, life safety of the garbage pickup of 6 on-street bins adjacent to State/N San Mateo Drive, life safety of the deletion of PD lighting requirements.” Project review by the DRB and the Planning Commission was guided by the City's adopted objective standards, and the Planning Commission approved the Project after finding it complied with these standards. While the appeal requests additional studies and suggests life-safety impacts, it does not provide any evidence to suggest that the DRB or the PC review was inadequate or that the Planning Commission’s approval was made in error. In addition, the appeal does not provide evidence of a specific adverse impact that would result from the Project.
4.“CEQA requires that the City add a condition requiring a Phase I Env. Assessment, but none appears” The appellant is correct that review under AB 130 requires project approval to include a condition of approval to require a Phase 1 Environmental Site Assessment. For this Project, such a condition was not needed because the DRB review was already informed by Phase I Environmental Site Assessments prepared for the parcels comprising the entire site, as well as by a Phase II Environmental Site Assessment prepared for the North San Mateo Drive parcels.
5.“Conditions should be amended to provide opportunity for City staff and residents to meet and to review and provide input on Construction Mgt Plan and conditions related to requiring studies to be completed prior to any demolition (e.g. including, but not limited to, Phase I Env. Assessment, project operational noise, off-site glare, odors, energy impact and mitigation to adjacent residences, on-street parking study and mitigation measures).” The conditions of approval adopted by the Planning Commission were based on a thorough review by the DRB and reflect the objective standards adopted by the City. Construction of the Project will be subject to a Construction Management Plan prepared in accordance with the City's Construction Management Plan requirements to manage all aspects of construction and ensure the timely completion of the Project while minimizing adverse impacts on neighboring properties and residents. While the appeal asks for amended conditions and an opportunity for community review and comment, the appeal does not provide any evidence to suggest that the conditions of approval are inadequate or that the adoption of these conditions by the Planning Commission was made in error. In addition, the appeal does not provide evidence that additional or revised conditions are needed to avoid a specific adverse impact that would result from the Project.
6.“Garage entry/exit needs to be relocated to N. San Mateo Drive to eliminate off-site glare and limit traffic traveling on neighborhood streets”
The City’s General Plan Circulation Element classifies North San Mateo Drive as a Minor Arterial (see Figure C-3, Existing Caltrans Roadway Classification Map). Per SMMC section 27.64.025, new driveway access to arterial streets is prohibited unless no other means of access is available, and existing curb cuts on arterial streets shall be eliminated in new developments whenever feasible. The Project complies with this Municipal Code requirement by removing all curb cuts along North San Mateo Drive, and by providing access to the enclosed parking garage via a new curb cut on Villa Terrace.
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7.“per SMMC in E2 Dist. recreation areas and garbage operations need to be fully enclosed to limit noise, glare and odors.”
Per SMMC Section 27.48.050, “All uses permitted within this district shall be conducted within completely enclosed buildings...” Here, “Permitted Use” refers to the land uses allowed by the Land Use District, and for the Project, the permitted use is residential units. The Project’s residential use would be within a fully enclosed building, and thus the Project complies with SMMC section 27.48.050. The unenclosed elements of the Project (such as building setbacks and open space) are not subject to SMMC section 27.48.050 as they are typical features of residential units within the City (and the application of this section in this manner is reflected in two other projects approved within the E2 Zoning District: 477 9th Avenue and 1650-1720 S. Amphlett Boulevard). Per SMMC section 27.04.350, required usable open space, including recreation areas, is outdoor (unenclosed) space. Project trash, recycling, and green waste will be stored within the building except when accessed by Recology for routine pick-up.
In summary, the appeal does not provide evidence that the Project is inconsistent with any objective standards or that the Project would have a specific, adverse impact on public health or safety. Thus, Staff recommends that the City Council deny the appeal and approve the Project, based on the findings and conditions provided in the draft Resolution (Attachment 1).
FISCAL IMPACT:
As a new housing project filed under SB 330, the Project is subject to development impact, in-lieu, and linkage fees in effect at the time of the application filing date. Based on the City’s Development Fees, the estimated 5 fees are listed below (and these fees are assessed and collected prior to the issuance of building permits or occupancy):
•Wastewater Capacity Charge of approximately $1,252,000 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. •Transportation Improvement Fee of approximately $536,000 to fund citywide traffic improvements. •Park In-Lieu/Impact Fee of approximately $3,815,000 to offset the increased demands on park and recreation facilities serving new developments.
•Art in Public Places Fee in the amount of 1.19% of the total building valuation (excluding land acquisition and the cost of any off-site improvements) in lieu of providing on-site public art. •Tree Replacement & Landscape In-Lieu Fee of approximately $8,500, which is assessed when a project removes more trees than are planted on-site or along street frontages by the project. •Childcare Development Fee of approximately $610,000 to fund the development of childcare facilities. •School Impact Fees in the amount of $4.94 per square foot of residential area to offset the increased demands on school facilities caused by new development. This fee is assessed and collected by the San Mateo Union High School District for all schools in San Mateo.
ENVIRONMENTAL DETERMINATION:
Approval of the Project is subject to a new statutory exemption under Public Resources Code section 21080.66, signed into law by AB 130. To facilitate the City’s review of the Project under this exemption, on August 11, 2025, the applicant provided a memo to document the Project’s qualification under Public Resources Code section 21080.66(a) (Attachment 7). The Project complies with AB 130; an assessment of how the Project complies is in the attached Draft Resolution.
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 with the City. The Project Conditions of Approval (Attachment 1) include the conditions that are required to satisfy the requirements of AB 130 to avoid impacts on tribal cultural resources. 5 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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STRATEGIC PLAN ALIGNMENT
This staff report supports the Housing initiative.
PUBLIC NOTICE AND COMMENTS:
Public comments received by the City during the review of this Project are included in Attachment 9. A total of five public comments were received (including two submitted by the appellant). Comments expressing concerns cited building height and scale, incompatible architectural style, inadequate setback and greenspace, parking deficiencies, traffic congestion, loss of airflow, sunlight impacts, construction parking, noise, odor, and glare. Comments expressing support cited the positive impact of infill housing for transit, walking, and biking, and the removal of blight caused by the site’s existing surface parking.
One letter did not raise concerns or offer support but instead encouraged the City to adhere to the standards for review required by the HAA, State Density Bonus Law, and AB 130.
Additional public comments received following the publishing of this Agenda Report will be forwarded to the City Council for review and consideration at the Public Hearing and posted to this item on the City’s Public Meeting Portal as “Post Packet Public Comments.”
In accordance with Government Code section 65090, notice of this Public Hearing was published in the San Mateo Daily Journal newspaper more than ten days in advance of this City Council meeting. In accordance with Government Code section 65091 and the noticing requirements found in SMMC section 27.08.050, notice was also provided more than ten days in advance of this City Council Public Hearing as follows:
•Mailed to all property owners, residential tenants, and business tenants within 1,000 feet of the project site; •Posted in three Public Facilities;
•Posted On-site – all project frontages;
•Emailed to the City’s Planning “Notify Me” email list; and •Mailed to the interested parties list, which includes interested individuals who contacted the City and requested to be added to the project notification list.
ATTACHMENTS:
Att 1 - Proposed Resolution
Att 2 - Appeal Form to the City Council
Att 3 - Location Map
Att 4 - Project Plans
Att 5 - Project Data Table
Att 6 - Planning Commission Agenda Report and Resolution to Approve, with Findings and Conditions of Approval Att 7 - Categorical Exemption Memorandum
Att 8 - Local Traffic Assessment
Att 9 - Public Comments
STAFF CONTACT:
Joanna Winter, Planning Manager
[email protected]
(650) 522-7211
PREPARED BY:
Greg Powell, M-Group Consulting Planner