Marin Transit approves $14M purchase agreement for San Rafael lot

A former car lot in eastern San Rafael that was set to become a 184-room hotel could instead turn into a hub for Marin Transit’s electric bus fleet.

The Marin Transit board voted 6-1 on Monday to approve a $14 million purchase agreement with property owners Marin Hospitality Inc. for its 3.5-acre lot at 1075 Francisco Blvd. East in the city’s Canal neighborhood.

The vote did not approve any specific project. However, the intent is to start looking at potentially developing the property into a maintenance, charging and storage site for zero-emission buses, a project supported by a $31.5 million federal grant.

“It is only a purchase agreement today,” said Marin County Supervisor Dennis Rodoni, a Marin Transit board member. “The project still needs to be designed and planning efforts need to be kicked off, and that really just means this is the beginning of that discussion.”

San Rafael officials — including Councilmember Maribeth Bushey, the board member who cast the dissenting vote — said this is a bad move for the traffic-plagued, densely-populated and underserved Canal community.

The project site is bordered by Interstate 580 on the west and Kerner Boulevard to the east. Access to and from the freeway is limited through chokepoints on Bellam Boulevard, a road that is at the center of a proposed county project to improve local and commuter travel.

Bushey said the criteria used to select a potential hub included “compatible land use” and “being a good neighbor,” which “is more than just technically fitting in within zoning requirements.”

“It’s looking around and seeing what would this site do to the neighbors,” Bushey said. Bushey said streets in the area are one-way and she is concerned the price might be too high.

San Rafael Mayor Kate Colin urged the board to pause on the purchase agreement to take time to engage the community on a plan. Colin said a bus yard would not benefit the community or the city.

“It runs the risk of perpetuating systems of inequity in the Canal neighborhood, a disadvantaged community,” Colin said. She also said the city would lose out on property tax revenue it would earn from a different type of development on the site.

Marin Hospitality Inc. has owned the property since 2016. It won approval for the 184-room, five-story hotel plan in 2020, and applied for a building permit the following year, said Micah Hinkle, director of community and economic development for San Rafael.

Nancy Whelan, general manager of Marin Transit, said the property owners approached the agency about the sale.

“They believe that the current financial conditions prohibit their planned development of a hotel on the site,” Whelan said.

The property is zoned for general commercial and has a general plan land use designation of community commercial use, which means housing could be developed there. The maximum would be about 21 to 43 dwellings, Hinkle said.

After the meeting, Colin said the site “is one of the last undeveloped lots in the Canal neighborhood.”

“And while having a bus parking lot conforms to existing zoning, there are higher and better uses that could go there and would have more community benefits for both the neighborhood as well as the city,” Colin said.

Colin said she wants Marin Transit to enter a memorandum of understanding with the city to ensure that the environmental and economic implications are addressed “through guaranteeing permanent community benefits.”

Marin Transit officials said that after 10 years of looking for a bus yard, the agency has considered 75 properties, conducted nine appraisals and made 15 offers. From that effort, the district has secured three small sites, but still needs a larger home base for the majority of its 114 buses.

Buses and paratransit vehicles are operated and maintained through contractors with four vendors, Whelan said. Vendors own or lease storage and maintenance facilities.

Whelan said investing in a permanent district-controlled storage and maintenance yard would help free the agency from depending on contractors, enabling it to transition to an electric fleet.

Last year, the Biden administration awarded Marin Transit a grant of $31.5 million to construct a hub. The grant, the largest the agency has received, comes as Marin’s main local fixed-route bus operator and other transit agencies are working to replace their gas-powered buses with all-electric or other no-emission replacements by the state’s 2040 target.

Marin Transit is providing a $15.1 million local match for a total investment of about $46.7 million for the new hub, Whelan said.

The grant also includes $2.2 million for workforce development, including training of existing workers and training and apprenticeships aimed at diversifying the workforce with new recruits who are women and people of color. A portion of that $2.2 million must also be spent to develop onsite child care or subsidize child care for transit workers, Whelan said.

Whelan said the funds have to be obligated within three years.

Whelan said the Monday approval authorizes a $100,000 deposit toward the purchase. It also authorizes spending $425,000 for a 60-day due diligence period that will include an environmental assessment and other property investigation. The agreement anticipates closing escrow up to 30 days after investigations.

The board will not consider approving or denying a project until the agency has prepared a site plan, conducted public outreach and completed environmental review, Whelan said.

Whelan said the creation of a bus hub is expected to create more than 130 construction jobs.

The majority of board members said they wanted to secure the site and start drafting plans so they can engage the public. Board members said they are also interested in entering an memorandum of understanding with San Rafael.

“We do need a good partnership with the city of San Rafael in going forward with whatever we do,” said Marin County Supervisor Stephanie Moulton-Peters, a transit board member.

“We’ve got to get control of the property. This is our opportunity,” Moulton-Peters said. “Whether this becomes the ultimate property, I don’t know, but I think we need to make the purchase.”