But while the vacant 770,000-square-foot suburban office park — it once housed 2,500 workers — has been a weak spot in Novato’s economy since the insurance company left seven years ago, it is now positioned to give the northern Marin County city something that could make it the envy of its neighboring communities: a major source of new housing.
Bay West Development, which bought the property with a partner in January for $28 million, is proposing to knock down the three concrete office buildings and replace them with 1,081 housing units. The plan calls for single-family homes along the western portion of the property, townhomes within the project’s core and 55-foot multifamily apartment buildings fronting Redwood Boulevard. The apartment buildings would have a bike and pedestrian connection to the Sonoma-Marin Area Rail Transit station across the street, to the SMART train that runs between Santa Rosa and Larkspur, near the ferry terminal. About 26 acres would be public open space.
While the planning process for the redevelopment likely will take two years, the timing could not be better for Novato, which, like all California cities, is under increasing pressure to meet state-mandated housing goals. The 1,081 units would represent more than half of the 2,090 homes Novato likely will be required to produce in the next eight-year Regional Housing Needs Allocation cycle, known as RHNA, which will run from 2023 to 2031.
Novato City Councilmember Susan Wernick, who represents the neighborhood where the Fireman’s Fund campus is located, said she feels fortunate to have 63 acres on which to build housing at this juncture. When Wernick moved to Novato in 1982, the bucolic Fireman’s Fund campus was just being built and was heralded by the city as both a revenue generator and a source of good jobs.
“Now all these years later there is a lot less demand for office space, but we have this housing crisis we have no choice but respond to,” said Wernick. “I think we could end up with a really great project.”
In total, Marin County will be required to build 14,000 housing units during the RHNA cycle. Several Marin cities are appealing the RHNA allocations: Sausalito is asking for a 83% reduction and San Anselmo is requesting a 67% drop in its goals. But experts say those appeals are unlikely to succeed.
Novato, a city of about 50,000, sits at the threshold of Marin and Sonoma counties. It is 11 miles north of San Rafael, Marin’s county seat and 11 miles south of Petaluma. Home to Biomarin Pharmaceutical, and the Buck Institute for Research on Aging, Novato is far enough away from job centers like San Francisco and Silicon Valley that it has not attracted the big tech firms such as Google or Facebook. Commercial rents are 22% cheaper than San Rafael and 44% less expensive than Larkspur. Its 2 million square feet of industrial space is nearly fully occupied.
And Novato is not only a more affordable place to do business; its housing costs are also less than other Marin towns. While the average home price has jumped 16% since the pandemic started to about $1 million, it is still cheaper than Marin cities like San Anselmo, where homes average $1.59 million; Corte Madera, where homes average $1.7 million; or Mill Valley and Larkspur, which both are approaching average listing prices of $2 million, according to Zillow. San Rafael is about 30% more expensive than Novato.
“Novato is more like Sonoma County than southern Marin in terms of having a balanced economy,” Sonoma State economics professor Robert Eyler. “It’s always been that bridge between the more suburban and more rural part of the North Bay.”
Haden Ongaro, managing director at the commercial real estate brokerage Newmark, said that it made sense that the Fireman’s Fund land would go residential. The campus was far too big for most Marin tenants, the majority of which require less than 5,000 square feet, and too far from mass transit options to appeal to the tech giants like Google and Facebook. The pressure from Sacramento to produce housing gives home-builders increased confidence that they can overcome Marin’s famously anti-development politics, he said.
Ongaro compared the Fireman’s Fund proposal to that of the Northgate Mall in northern San Rafael, where a new owner recently proposed a plan that would add more than 1,300 housing units to that largely vacant retail complex. Residential developers are eyeing several other obsolete commercial sites in the county, he said, including several around downtown Novato.
“There is a lot more pressure to deliver housing — that is something that I hear in my dealings with local officials,” he said. “A residential developer can justify paying a little more for a site than they would have because there is a better chance it won’t take eight years to get approved.”
Beyond satisfying the state-mandated housing goals, adding several thousand residents to the Fireman’s Fund property could help pump more life into downtown Novato, which is about 1 mile to the south. The shopping district has seen an influx of new businesses in the past few years, including the restaurant Blue Barn, Masa’s Sushi, Rustic Bakery, two wine tasting rooms, two tap rooms and two bike stores. Other businesses include Copperfield’s Books, Irish bar and grill Finnegan’s Marin, and Village Child, a kids’ clothing store.
Stephanie Koehler, executive director of the Downtown Novato Business Association, said the Fireman’s Fund project would bring much-needed customers to the burgeoning district’s 411 businesses.
“Our downtown has improved drastically since Fireman’s Fund closed — we have much better stores and restaurants,” she said. “But we could use more foot traffic. The thing about any downtown is it’s like chicken and the egg — you need the people to come buy the stuff or go to the restaurants.”
Other housing developments proposed for downtown Novato include 32 units at 1107 Grant Ave., a former hardware store, and 227 units of affordable housing at Novato Medical Center at 1316-1320 Grant Ave. — although that project faces opposition due to lack of proposed parking, Koehler said.
Emily Rich, who owns Village Child on Grant Avenue, said foot traffic is up 30% since she opened in October of 2018.
“Novato is a sleepy town in general,” she said. “It’s not a destination like some of the other Marin cities. It’s a little bit the ugly stepchild of Marin — you say you are from Novato and there is a sense that, ‘Well that’s not quite Marin.’ But I think we are coming into our own. Novato has a rich underbelly of culture and community that may not be obvious to outsiders. There is a lot of civic pride and a lot of people who have been here for decades.”
J.K. Dineen is a San Francisco Chronicle staff writer. Email: email@example.com Twitter: @sfjkdineen