These two buildings were typical of the East side of San Carlos where for decades industrial uses ruled: concrete tilt-up buildings with good bones and limited parking with a cloud of perceived griminess due to the former industrial uses in the area. These buildings, however, were also in an area that was designated to be at the forefront of change for the City of San Carlos. They were directly adjacent to an area that the City of San Carlos zoned for hotel use.
One was a former auto repair and boxing gym that was always creating undesirable traffic impacts to the local neighbors. The other was a windows and door warehouse operation with tractor trailer deliveries in the early morning hours and forklift activity throughout the rest of the day.
Based on our team’s local knowledge of the planning and zoning codes, we knew that there was an opportunity for these owners to capture and direct the code to their advantage. We reached out to the building owners and advised them that the City of San Carlos was on the verge of being the next “it” place for prime real estate development due to the changes made to the City’s zoning codes.
We created a strategy for the owners that included a transformation of the building’s exterior and their allowed uses that we knew would not only complement the plans for the new hotel, but would also be responsive to both the City planning director and to the neighbors who had been living with the traffic and noise impacts of the warehouse and boxing gym. The strategy was that our team would approach the City on the owners’ behalf and negotiate a conditional use permit to change the existing zoning from industrial uses to allow for a blanket set of uses based on negotiated parking standards.
Such uses included not only allowing for the existing industrial uses to remain as allowed, but also included office/R&D, life science, and retail uses. In return, the owners agreed to remodel the exteriors of the building to complement the look of the new hotel. Additionally, we saved the owners significant money because the City’s development fee structure increased shortly after our approvals were received.
Once the conditional use permit was obtained, our team coordinated a strong marketing campaign to secure tenants. Because of our vast knowledge of tenants in the market, we strategically approached the likely candidates and signed a lease for ±17K SF with Whirlpool Corporation. And on the other building, we leased ±20K SF to a brand new Harley Davidson dealership. These long-term leases were signed prior to completing the exterior improvements for the buildings.
