High above a row of modest homes being built in the Hacienda Business Park in Pleasonton, Calif., looms a 5-story office complex.
Such incongruencies are becoming more common in suburban business parks across the state. A still-recovering economy means corporations aren’t looking for new space.
Developers, unable to attract office or industrial tenants, have been forced to seek alternative uses for vacant land.
In the East Bay area outside San Francisco, business parks facing this predicament include Hacienda, Livermore’s Triad Industrial Park, Walnut Creek’s Contra Costa Centre and Richmond’s Hilltop.
Proponents of this shift toward a mix of commercial, residential and retail uses in existing business parks say such developments allow people to live, work and shop in one place.
But opponents-while acknowledging the benefits of grouping homes, businesses and shops-say converting partially built business parks to mixed- use developments can create a whole host of other problems.
Roads laid out to accommodate heavy trucks are unfriendly to families and shoppers. And such parks lack the hiking trails and bike paths, schools, churches and other facilities that mark popular residential communitites.
“There are a lot of questions with retrofitting that wouldn’t occur if you planned it right from the start,” said Steve Preston, president of the California chapter of the American Planning Association.
The trend underscores a shift in philosophy among planners toward mixed- used developments, said Preston.
“There is a lot of talk in the profession that separating land into different uses is no longer the most effective way to plan.”
That’s a problem for business parks that still have large parcels of undeveloped land on the outskirts of suburban towns. Such parks mushroomed in many areas of the country in the 1970s and 1980s, luring corporations out of urban centers with lower rents and their proximity to affordable housing.
That all changed with the commercial real estate crash of the late 1980s and the recession of the early 1990s. Few companies have needed new buildings in the past five years, and construction in many business parks has come to a standstill.
That puts the squeeze on developers who continue to pay hefty taxes and assessments on vacant land that is not producing income.
Converting a business park to other uses is not an issue for fully developed parks which have little or no vacant land or ones already integrated into neighborhoods.
In Pleasanton, Prudential Realty Group designed the Hacienda Business Park in the early 1980s to capture spillover from the development boom in Silicon Valley. While the park is home to AT&T and PeopleSoft, it never reached its potential and 300 of its nearly 800 acres remain undeveloped.
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In the past few years, Prudential has received permission from the city to develop retail businesses on the edge of the park that fronts Interstate Highway 580 and build several housing projects within the park.
One critic of the rezoning is Robert Pearson, a former city councilman. He is concerned about children living in homes near busy roads used by trucks.
‘If there is anything Pleasanton doesn’t need, it is more residential, ” Pearson said.
“We need more commercial (development). We don’t need to accommodate those uses for the profits of Prudential. That’s the only reason it’s being done.”
But homes were in Prudential’s original plans, contends Joe Callahan, who helped Prudential develop the park.
He said that back in the early 1980s, “we couldn’t figure out what type of housing or where it should be, but the housing discussion has always been on the table.”
Many tenants are simply glad to see construction start up again.
“AT&T supports growth within business parks,” said spokeswoman Nancy Crispino of AT&T, which is a major tenant in the Hacienda.
“Additional tenants of any kind within the business park can help keep costs down by providing the park with additional revenues.”
At the Contra Costa Centre, a business park adjacent to the Pleasant Hill Bay Area Rapid Transit station, several land owners are eager to get their parcels rezoned, said Jim Kennedy, Contra Costa County’s redevelopment director.
Original plans for Contra Costa Centre called for 3.2 million square feet of office space and 2,000 housing units within a quarter-mile of the BART station. The rezoning plans on the table would shift the mix to 2 million square feet of office and 3,000 housing units.
“That balance can be achieved without undermining the employment center-the business park notion-that has been the touchstone of the area to date,” Kennedy said.
Putting more housing around the BART station is not the best use for the land, contends broker Sean Cooley of CB Commercial in Walnut Creek.
“I don’t think it’s good for the rest of the owners who have already built office buildings,” said Cooley. “It doesn’t create a synergy.”
One owner of a parcel slated for an office development in the Contra Costa Centre is waiting out the market.
“The best use for the particular property is what is approved, which is two 10-story office buildings totaling 375,000 square feet,” said Merle Gilliland, who represents WC North Venture, owner of the land.
Neither housing nor retail uses on the land make financial sense, said Guilliland, yet the property’s location near BART and Interstate Highway 680-plus the fact that there is little vacant land along 680-makes it prime for office development.
Gilliland expects demand for the land to heat up within three years, as consolidating companies seek new office space.
Meanwhile, Gilliland’s clients are among the owners of vacant land in the park who continue to pay $3.65 per square foot every six months in assessments.
“It is a burden,” admits Gilliland.
In the Triad Industrial Park in Livermore, where more than half of the 300-acre park remains undeveloped, 60 acres fronting Interstate 580 were rezoned in early 1993 to allow for retail uses. Already open for business on the retail land is big-box retailer Costco.
Triad hopes to attract at least two other big-box users, as well as small- and medium-size retailers, and has submitted plans to the city to build homes on another 27-acre parcel, said Larry McReynolds, manager of real estate and facilities for Triad Systems.
The city of Livermore has been supportive of Triad’s efforts to shift to other uses, McReynolds said.
“We saw that the industrial market was slow and that there was a demand for retail in the 580-680 corridor.”
The mix of uses has benefitted the park, said McReynolds. The roads are used at different times by business people and shoppers, and industrial park tenants can shop at the Costco without having to get on the freeway.
“We think it mixes very well,” McReynolds said.
The 950-acre Hilltop park in Richmond was originally designed as a mixed- use development. The park, surrounded by residential neighborhoods, boasts a regional mall, a variety of housing and an industrial park.
“We had to address early on our relationship to residential,” said Mary Lou Francisco, project manager for Chevron Land and Development, developer of the park.
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In the late 1970s and early 1980s, Hilltop was positioned to capture a spillover from San Francisco’s office market. But the developers of the Richmond park didn’t anticipate the rapid growth of office developments in Concord and Walnut Creek, which diverted much of its potential business.
A 45-acre parcel in Hilltop, once slated for 1 million square feet of high-rise office buildings, remains undeveloped.
“Our office market has really dried up,” said Francisco. “You really have to look for other uses.”