Update: During executive session on May 4, the Rancho Santa Fe Association board discussed the Gateway project and conceptually agreed to refine the terms of the Covenant and that the previously submitted and CDRC-approved project can move forward with the rest of the process. The project, including a market, is expected to be presented to the board for final review in June.
Landrock Development has decided to withdraw its request for a variance to increase the square footage of the proposed Village Gateway development and will instead be pursuing a scaled-down version of the project. Unfortunately for developer Enrique Landa, this means that the plans no longer include a 5,000-square-foot market.
“We are committed to helping the Rancho Santa Fe village thrive and have worked over the last five years to make this project a part of the revitalization of the village,” said Landa, who has lived in Rancho Santa Fe for over 25 years. “We want to provide a grocery store but under the circumstances, we’re not in the position to do that.”
The “shrunken-down” project, proposed for the current gas station property at the entrance to the village, is proposed to be a mix of retail and office space and to be in compliance with all Rancho Santa Fe Association governing documents.
The Gateway project’s other proposed community amenities will remain, such as remediating the gas station property’s potential environmental hazards, providing public open space and courtyards, providing off-street underground parking and delivering office space intended to free up Paseo Delicias for more retail offerings.
They have also agreed not to house a financial institution or real estate brokerage in the project.
As the Landas began planning Gateway five years ago, they requested that the Association consider granting a variance to increase the project’s floor area ratio (FAR) for various reasons, including the ability to increase the square footage allowed and to create a financial cushion for the risk associated with remediating potential soil contamination under the longstanding gas station property.
As Gateway went through the process, Stump’s Market closed and the Covenant Design Review Committee (CDRC) and the board suggested that LandRock try and secure a market tenant, which it then incorporated into its plan.
Landa said the inclusion of the market made the FAR increase even more imperative to the financial viability of Gateway as grocers are not able to pay Rancho Santa Fe’s high rents.
The project was approved by the CDRC in October 2016 and was slated to go before the RSF Association board for approval. The Landas worked with Bill Cardon of the CDRC, Building Commissioner Tom Farrar and then-Association attorney Alan Zuckerman to negotiate the final terms of the Restrictive Covenant.
The Landas were set to present the project to the board for approval when they were advised that the Association had changed counsel and the new attorneys wanted to provide their input. Landa said that the resulting revised draft felt like it set the project back 10 months and included concepts that they previously indicated would make the project infeasible.
The Association’s request to include a market “in perpetuity” as part of a deed restriction brought forward several issues.
“The Association wanted the project to include a grocer ‘in perpetuity’ under very limited circumstances which is very challenging,” said Fernando Landa, attorney for the project. “Forever is a long time, especially in the changing retail and grocery business. We thought it was inappropriate to agree to something for forever given to serve a particular need now.”
Another issue was that the Association board wanted pre-approval of the grocer or any subsequent retail tenant.
“The problem with that was that a tenant was not going to wait for three to seven months to get approved by the board before going into a space when other space options are available. They wouldn’t want to take the risks of such a political process,” Fernando Landa said. “It made leasing the retail space if not impossible, incredibly difficult with those restrictions.”
Another condition the Landas found unworkable was the requirement that if there is not a market tenant when the project is complete they have to wait six months before any other tenant can move into the project.
“We can’t have a space empty for six months, we were not willing to take that risk,” Enrique Landa said.
Adding additional pressure to the Landas to get the project completed is the difficult circumstances currently facing the landowners the Rababy family. Father Tony and son Mark passed away within months of each other in 2016.
“We promised to do our best effort to get the best building and the best design for the family because it’s a very important asset for the family,” said Enrique Landa, who first befriended the family as a customer of the station. “We’re trying to get the project approved as fast as we can…At some point we have to go for not the best alternative but the next best thing. We just feel that we need to move on.”
The Landas stressed that their dealings with the Association have been very positive, respectful and amicable. Enrique said the Association staff has been great to work with and that they have become friends throughout the process — he wishes they could find a solution that works for everyone.
“Association staff is working with Landrock Development on a plan that will be in the best interests of the community,” said Christy Whalen, assistant manager of the Association. “We are continuing discussions with the developer about the Gateway project, which would include a potential market as well as retail, offices, open space and underground parking.”
“We will do everything we can to have a market in Rancho Santa Fe, within reason,” Enrique said. “We love Rancho Santa Fe, we want the village to thrive, we want houses to have better home values and to have more services for the community.”
“We have been working toward a project that everyone can be proud of,” Enrique continued. “We call it Gateway because it will dramatically improve the window to Rancho Santa Fe. The open space is going to be fantastic.”