Site One hits big snag for a fifth time

Millbrae’s mammoth $310 million project to create one of the largest entertainment sites on the Peninsula has come to a grinding halt.

City staff announced late Thursday it is recommending to the City Council to not extend the expiring contract of Fancher Partners, the Irvine-based developer tasked with acquiring the land for Millbrae’s redevelopment plan dubbed Site One. The city has already granted Fancher four 90-day extensions to buy the properties.

The staff recommendation would at least greatly delay the project’s construction, slated for 2009. It could also lead to changes in the project, including scaling back plans, City Manager Ralph Jaeck said.

“What we’re doing isn’t working well, so we need to do something differently,” said Jaeck, who called the project the city’s highest priority.

The decade-old redevelopment plan would be built on 8 acres of land adjacent to the city’s BART-Caltrain station and El Camino Real, next to the Millbrae Avenue exit off U.S. Highway 101.

Before it can be built, however, the developers need to purchase two-thirds of the businesses’ land in the area to make room for the new project. Some of the businesses, which include restaurants, a lumberyard and a convalescent home, have refused to sell land, stalling the project.

The decision of whether to extend Fancher’s contract comes before the council for the fifth time Tuesday, but this will be the first instance in which the city will recommend not extending the deadline for the developer.

Fancher representative Dan Rogers said his team has made “major strides” by offering record prices to businesses. He said he was still “very encouraged” despite the city’s recommendations.

“I’m quite comfortable with where we are right now,” Rogers said.

The decision to extend the contract will ultimately fall on the council’s shoulders. Four of five councilmembers reserved judgment on the decision when reached for comment Thursday, saying they would wait until Tuesday’s meeting to decide.

“It appears to be a very exciting project if it comes to fruition,” Mayor Gina Papan said. When asked whether she thought the project would ever be completed, she said, “I couldn’t tell you.”

Councilmember Paul Seto has begun thinking of possible modifications to the project’s game plan, including possibly bringing other developers into the fray.

Use of eminent domain possible

As a strategy to acquire land around Site One has seemingly failed, the debate about whether Millbrae city officials shouldforce out businesses in the area will be reignited.

Eminent domain, or the power of government to forcibly buy private land for public use, could be used by the city to buy out and demolish the businesses in the area to make way for the new shops and other buildings associated with the Site One plan.

The option has always been on the table but has not been officially voted on by city leaders.

The city’s staff has yet to provide a recommendation on whether to use eminent domain, a debate that would ultimately be settled by the City Council.

“I think if [eminent domain] is done correctly, it’s actually not a bad option,” said councilmember Paul Seto. “However, we need to be really cognizant of the community and what their thoughts are, because they will be affected very closely by this.”

“There’s always an option” to use eminent domain, said Mayor Gina Papan. She did not know whether council members would officially debate the issue in the future.

But the passage of state Proposition 98 on the June 3 ballot would end any eminent domain discussion. That measure would ban governments from using eminent domain. A recent poll of state voters by the Public Policy Institute of California showed that just 37 percent of California voters would support the measure while 41 percent would oppose it.

City Manager Ralph Jaeck said that the city has been reluctant to use eminent domain and that it would likely be a last resort ifproperty owners refused to sell at reasonable prices.

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