A Los Angeles-based developer has paid millions to buy a suburban strip mall it hopes to turn into a massive transit-oriented development.
December 27, 2021, The Mercury News
REDWOOD CITY — A Los Angeles-based developer has paid $73 million to buy property at the Sequoia Station shopping center off El Camino Real that it hopes to transform into a mixed-use transit-oriented development, another significant step in the city’s massive downtown redevelopment project.
Real estate investment firm Lowe recently sealed an off-market transaction to acquire Regency Centers Corp.’s six-acre portion of the 12-acre shopping center in downtown Redwood City, whose anchors are CVS and Safeway. Lowe already owned the other half of the site.
It’s a part of town city officials are eyeing for creation of a transit-oriented district as Caltrain seeks to become BART-like with more frequent service and electrified trains.
Though the shopping center has served the community for decades, it sits in the shadows of a growing downtown that since the start of the tech boom has seen explosive development growth that has revitalized the city.
Sequoia Station is a key piece of the puzzle for the city’s larger plan to develop a 17-acre transit district adjacent to it, expanding downtown’s footprint.
In October, Lowe unveiled its latest proposal for the site, a development that will feature up to 631 apartments — 40% of them affordable — 1.2 million square feet of office space, 170,000 square feet for CVS, Safeway and other retailers, a child care center and open space connecting downtown to a train station and the city’s west side.
Lowe’s plan has undergone multiple iterations over the past several years, and its most recent version shows a sharp increase in total parking spaces for apartments and retailers and a reduction in office space in response to complaints that the development could exacerbate the city’s jobs-housing imbalance. The original proposal called for 1.4 million square feet of office space, up to 225 apartments and 176,000 square feet of retail space.
Alan Chamorro, vice president and Northern California regional leader at Lowe, said that despite the multiple changes, the project is “better as a consequence.”
“The developer generally always wants to control the process because of uncertainty,” Chamorro said. “But in this circumstance, the project has gotten better. It makes sense the city wanted to control the transit district planning process because this is a very important piece of real estate in the city. While it can be frustrating, it’s allowed us to build three times more housing and less office space.”
Lowe’s decision to grant Caltrain the part of the property adjacent to its tracks was key because it will enable the transit agency to elevate the rails and build a station atop it, Chamorro said.
Caltrain’s 2040 vision plan calls for modern electrified trains running from San Jose to San Francisco 15 minutes apart. That plan requires multiple rail-grade separations along the Peninsula, and Caltrain is hoping Redwood City — one of its busiest stations — will be the site for a new elevated train station interconnected with downtown.
Brian Fitzpatrick, Caltrain’s director of real estate said any development like Sequoia Station’s revamp near a Caltrain station is “good news for us.” The train station will hopefully bring new riders to the system, aiding it in its expansion, Fitzpatrick said.
“We’re happy to get people to and from where they’re going,” Fitzpatrick said. “The general look and feel and use and all those things, those are really city issues. I think our interest is that the (rail) right-of-way gets taken care of.”
For Fitzpatrick, the developer’s eagerness to transform this area of town is a step in the right director for transit-oriented development in the Bay Area. He said it’s “exciting” to see the developer is “willing to recognize the success of their development is dependent on having frequent public transportation.”
Mayor Giselle Hale said the project “exemplifies the city council’s top priorities: housing, transportation, and children and youth.”
She said the revamped station and transit-oriented development adjacent to it will help improve travel to and from Redwood City while offering community gathering spaces, shopping and modern amenities to visitors.
The next step is to do environmental reviews on Lowe’s plans for the site, which could take until next fall to reach the City Council for approval. After that, Lowe said it is ready to break ground.
“The redevelopment of our transit district is a once in a lifetime opportunity,” Hale said. “This is so much more than just rebuilding the train station or a single development. This is about creating a community hub for residents and visitors and for the Peninsula.”