Gateway at Millbrae Station
Media Contact: Randol White, (650) 647-3489
Board of Directors greenlights acquisition of new headquarters building
Agency acquires site at Gateway at Millbrae Station
Today, the San Mateo County Transit District (SamTrans) Board of Directors authorized the general manager to move forward with the acquisition of an approximately 180,000-square-foot headquarters (approximately 157,000 sq. ft. office, 23,000 sq. ft. retail) building located at the Gateway at Millbrae Station, adjacent to a transit center serving SamTrans, Caltrain and BART.
The Board voted 8-1 in favor of authorization.
Board of Directors Chair Josh Powell said, “The Gateway at Millbrae Station is a transit-oriented development that perfectly marries the agency’s mission and space needs with the desires of our employees to be adjacent to transit and amenities.”
SamTrans will acquire the building through a lease-to-purchase agreement at a cost of $126 million. The building is one of several in a transit-oriented development located on property owned by BART and is subject to a 99-year ground lease with BART. The site developer will pay for and complete all tenant improvements prior to move-in which are expected to take 12-15 months.
SamTrans validated that this lease to purchase agreement is at a below-market rate through both an appraisal and an independent third-party review of the deal terms. SamTrans has a AAA rating from S&P which enables it to issue municipal bonds at a favorable interest rate. If SamTrans ultimately chooses to purchase the building it will be supported by a bond. This building also provides options for revenue generation to help offset expenses from both retail and office rental space.
“Given the decline in the commercial real estate market, SamTrans has an opportunity to lease with an option to purchase a building that would accommodate both current and projected employee demands at a cost that is estimated to be less than the cost to rebuild at the existing site and at a greatly accelerated pace,” explained Powell.
Gateway at Millbrae Station is one of the largest intermodal stations in the western United States and was developed by Republic Urban Properties in conjunction with The Core Companies. The development features a new transit-oriented community that brings together market rate, veteran and affordable housing, modern offices and walkable retail, dining, services, a hotel and ample outdoor space. The property is adjacent to the Millbrae BART and Caltrain Station, which is also served by SamTrans routes ECR and 292.
Employee surveys confirmed that a new building is critical to employee retention and recruitment. “SamTrans continues to find itself competing for top staff in various disciplines including positions in transportation planning, finance, operations and infrastructure delivery” said SamTrans GM/CEO April Chan. “Moving to a new building adjacent to transit and other amenities will help ensure the agency can recruit and retain the personnel it needs.”
SamTrans plans to retain ownership of its existing headquarters site located at 1250 San Carlos Avenue in San Carlos and will work with the city of San Carlos to identify goals and objectives for the redevelopment of the site.
The current HQ building, an old facility built to 1970s seismic standards, is in an advanced state of disrepair and not designed for the modern workplace. The cost to bring the building up to modern standards greatly exceeds the value of the building.
A new HQ building will complement the rebuilding of the agency’s main building at the North Base Bus Yard in South San Francisco, which will provide a modern and comfortable home base for the agency’s operators and dispatch. Combined, these two projects provide the critical infrastructure needed now and into the future to house the agency’s workforce to deliver the necessary services for patrons.
The San Mateo County Transit District operates 71 routes and two on-demand service areas. Funded in part by a half-cent sales tax, the district also provides administrative support for Caltrain and the San Mateo County Transportation Authority. SamTrans has provided bus service to San Mateo County customers since 1976.
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