City Manager’s Perspective on Development, Workforce Housing, & Transparency

There has been an ongoing discussion about the need for workforce housing in Foster City and the proposal to revise a portion of the Pilgrim-Triton Master Plan to provide townhouses and below market rate workforce housing in place of the currently permitted office development. As City Manager, I would like to provide my perspective on the amendment to the Pilgrim-Triton Master Plan, workforce housing, and transparency in government. 

To provide some context, the Pilgrim-Triton Master Plan began as a discussion in 2001 regarding the reuse of underutilized and outdated buildings in the older commercial/industrial areas of the City. The City held several study sessions beginning in Fall 2005 to discuss how this area could be best used in the future. As a result of those study sessions, the Land Use and Circulation Element Goals, Policies and Implementation Measures were developed in 2006 for the Chess Drive/Hatch Drive and the Pilgrim Drive/Triton Drive Commercial Industrial Areas. 

Following the development of the draft Land Use Policies, the property owners in the area requested that the City consider a Master Plan for the entire 20-acre project site that was more consistent with the recently drafted Land Use Goals and Policies. Over the next year and a half, a number of public meetings were held to review and solicit feedback on the Master Plan proposal, which was approved in 2008. The approved plan consisted of 730 housing units and approximately 290,000 square feet of commercial and a one-acre open space plaza.

In the following years, development permits were granted for the following phases of the project:

• Phase A – The Plaza (307 units and 8,000 square feet of commercial) opened in 2013
• Phase B – The Triton Apartments (220 units and 5,000 square feet of ground floor commercial) should be open in early 2018
• Phase D – 100 Grand Apartments (166 units and 6,000 of ground floor commercial) opened in 2016

The site for Phase C of the Master Plan was acquired by Sares Regis in July 2014. The 3.5-acre property currently consists of 38,000 square feet of light industrial/office and is entitled for 17 residential homes and 172,943 square feet of commercial uses. 

After purchasing the property, Sares Regis attempted to find office tenants for Phase C but was unsuccessful. This was primarily because most tenants preferred office space in large (300,000+) contiguous blocks and located closer to public transit. In 2015, Sares Regis submitted a proposal to amend the Master Plan and replace 172,943 square feet of commercial and 17 multi-family units with 70 townhouses.  

Market Analysis for the proposed amendment was prepared to compare the feasibility and economic viability of the existing property mix compared to various development scenarios including office, mixed-use, and residential. The analysis concluded that neither the existing office configuration nor a mixed-use scenario is currently viable. In the long-term, the market would need to mature sufficiently to justify investment in an office or mixed-use project.   

After considering comments from the City Council and Planning Commission, Sares Regis revised the proposal for the amendment and returned to the City Council on October 2, 2017 with a term sheet for Phase C that included:

• Up to 70 for sale, market rate residential units and 22 affordable workforce housing units;
• For Sares Regis to acquire fee title to the 1.2-acre Workforce Land (estimated value of $4 million) and contribute that land to the City at no cost;
• For Sares Regis to contribute $3 million towards the design and construction of the Workforce Units to satisfy the affordable housing obligations for Phase C; 
• Responsibility for cost overruns in excess of the agreed upon final budget to be shared 50%-50% between the City and Sares Regis; and
• Rents from the project would cover the cost of managing and operating the project.

If this amendment to the Master Plan is approved, I believe this proposal will create an important community asset for the City by providing affordable workforce housing for City employees, including our police and firefighters. As we know, the Bay Area is one of the most expensive regions in the nation for housing. The high cost of housing is impacting the City’s ability to recruit and retain great employees and is simply not sustainable.  

This workforce housing proposal, along with others such as rental assistance and home loan programs, are part of an overall effort to recruit and retain great employees, who in turn provide the high level of services that our community receives. 

I encourage you to stay informed, ask questions, and be involved in the process as this proposal moves through the Planning Commission and City Council. As always, we remain committed to transparency, accountability, and honesty as we work to improve our City organization and our community.