San Luis Ranch may ditch 150,000 square feet of commercial space. What could go in instead?
When San Luis Ranch was first approved to break ground in southeastern San Luis Obispo, the promise of a significant expansion of market-rate housing came with a goal of adding several acres of commercial space within walking distance.
Now, those priorities appear to be changing.
At Tuesday’s San Luis Obispo City Council meeting, applicant Williams Homes proposed exchanging the 150,000 square feet of commercial space originally planned for Lot 7 of the master planned community for 276 units of rental housing.
Though the council did not make a decision on the new proposal, council members shared their thoughts on how Williams Homes can make the significant changes to the lot feasible.
“Right now, all we’re doing is deciding whether or not we can entertain the idea of this project,” Councilmember Emily Francis said. “When a project comes to City Council, we’re at the end, so this is like the reverse of when we normally see it.”
She added: “These opportunities to weigh in at this early stage are really rare.”
Proposal could boost San Luis Ranch to more than 900 homes
When Lot 7 of San Luis Ranch was originally approved in 2017, the focus of the project was strictly on adding commercial space to the 11.44-acre lot.
At the outset, around 150,000 square feet of commercial uses was planned for Lot 7, located across the road from the Madonna Plaza and adjacent to the future Prado Road/Highway 101 interchange.
In 2020, this commercial footprint shrank to around 114,300 square feet of commercial development, which would occupy 9.59 acres of the lot along with between 64 and 77 affordable housing units to be built by People’s Self-Help Housing on the remaining 1.85 acres.
This most recent proposal by applicant Williams Homes would do away with the bulk of the commercial uses from the previous plan, cutting the commercial space to just 15,000 square feet.
While the People’s Self-Help Housing development would be mostly unchanged — going from a projected 64 to 77 affordable units to 69 to 77 affordable units — the rest of the previous commercial space would instead become the home of 276 market-rate residential units, according to the staff report.
The People’s Self-Help Housing units would include one-, two- and three-bedroom units ranging in size between 650 and 1,150 square feet, along with indoor and outdoor amenities and wraparound services.
Meanwhile, the 276 market-rate units would not be owned homes, but rather market-rate rental apartments running the gamut of studios, one-bedroom, two-bedroom and three-bedroom units spread across eight 30-unit buildings and three 12-unit buildings, according to the staff report.
Similar to the People’s Self-Help Housing units, these apartments would range between 650 and 1,150 square feet and would be accompanied by a total of 345 residential parking spaces and 15 commercial parking spaces.
Two acres of the project would be converted to a privately maintained public park near the center of the new lot, connected by walking paths to the nearby residential buildings.
Williams Homes representative Glenn Adamick said the change from mainly commercial uses to a residential buildout was mainly motivated by a lack of interest by businesses to participate in the planned commercial space.
“We think that bottom line, the commercial component of this does not work anymore,” Adamick said. “This large commercial center just isn’t feasible — San Luis Ranch marketed this site for two-and-a-half years, and the only interest they got was a gas station or fast food restaurant.”
The remaining commercial space would sit on the corner of Dalidio Drive and Froom Ranch Way, and is currently planned as a two-story commercial building with 3,500 square feet of business space on each floor, though the applicant requested some flexibility to allow up to 15,000 square feet of commercial to respond to market conditions at the time of building permit submission, according to the staff report.
With this significant loss of commercial space, financial impact calculations project a net loss of around $1 million for the city due to the loss of sales and property tax revenue, according to the staff report.
Importantly, the new layout would essentially increase the maximum number of residential units in the project from 500 to a total 930 — 577 market rate residential units and up to 77 deed-restricted inclusionary units for a total of 654 residential unit approved as part of a Specific Plan Amendment by City Council in November 2020, 276 Williams Homes market rate rental units and a minimum of between 69 and 77 People’s Self-Help Housing units, according to the staff report.
As of today, the San Luis Ranch area has constructed only eight affordable units, while the market-rate project components of 577 total residential units are nearly complete, according to the staff report.
Residents split on new development use
Tuesday’s meeting was the first of many to come should Williams Homes move forward with the new proposal.
Future approvals include amendments to the city General Plan, San Luis Ranch Specific Plan, the development agreement, affordable housing agreement, tract map and development plan, along with a new environmental review under the California Environmental Quality Act and San Luis Obispo County Airport Land Use Commission.
Ultimately, the council voted 4-0 to start the formal planning and permitting process for the new site plan, with Councilmember Jan Marx recusing herself due to her status as a resident of the existing San Luis Ranch development.
Several San Luis Ranch residents attended Tuesday’s meeting and shared their thoughts on the change in land uses.
One resident who spoke during public comment said as one of the early San Luis Ranch homeowners, she felt “misled” by the change in uses because her property backs onto the lot.
“I’m worried about renters,” the resident said. “They don’t respect their community, they have no investment, they might be college kids, they could be from out of the area, but you don’t take care of a place like your actual place that you bought.”
Meanwhile, another resident said she hoped the project would next appear with a more “moderate, balanced approach” that can still accommodate more of the commercial amenities that residents were promised when they moved in.
Resident Chad Allen, who purchased a house bordering Lot 7 in 2021, said he was disappointed that the new site use may obstruct views of the hills and that a large commercial space would not be coming to his neighborhood.
“As a purchaser, you’re thinking ‘This is the property I’m going to get,’ and so that doesn’t really look good for us,” Allen said. “We came in early trying to really enjoy this area, and it’s not what we signed up for us as a resident.”
