Millbrae development decision looming

City officials must decide whether to extend an exclusive, expiring agreement with a Southern California contractor to build a major development near the BART station, for which the developer has secured financial backing.

The Millbrae Station Area Specific Plan, adopted in 1998, sought to encourage development around the Millbrae BART station in light of the pending opening of the then long-awaited transportation hub. One 5-acre parcel within that area, dubbed Site One, which now includes Peter’s Cafe and Millbrae Lumber, is planned to become a $200 million-plus jewel in that crown.

Irvine-based Fancher Partners is slated to build the cornerstone Site One development, set to include retail, housing and most likely an art-house cinema, on the west side of the station. Assembling all 10 properties on the site is proving to be a tough task, as there is some disagreement on how much the owners of the properties should be paid, even though they’ve been very amenable to the buyout, Community Development Director Ralph Petty said.

In addition to negotiating with the property owners, developer Chuck Fancher had to secure a financial partner to bankroll the project in order to strengthen his case for an extension on the agreement. Fancher declined to name who this partner will be.

The City Council was scheduled to take up this issue at its meeting this week, but Mayor Marc Hershman said it may be pushed to the first meeting in June.

Hershman said that he hasn’t formulated any ideas on what path would be best for the city. However, he reiterated that development of Site One — which is expected to boost sales tax, property taxes and draw patrons into downtown Millbrae — was still a major goal for the city to accomplish.

“It’s a key site for the city,” Hershman said. “And we have big plans for it.”

Fancher said the next steps, should the city decide to extend the agreement that is set to expire at the end of this month, are to come up with a solid design and construction plan. The company only has an idea for what types of businesses they want to have in the development, but much of the work expected to start in 2008 includes negotiating with potential tenants to make a deal with a hotel operator and two major retailers. Fancher said he expects that construction will start as planned sometime in 2009.

tramroop@examiner.com

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