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Report regarding anticipated proceeds from the sale of DNA Way, Point San Bruno Boulevard, and a portion of Cabot Road to Genentech and potential uses of these funds. (Sharon Ranals, City Manager)
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RECOMMENDATION
Staff recommends that the City Council receive a report on funding projections from the sale of DNA Way, Point San Bruno Boulevard, and a portion of Cabot Road to Genentech. Staff is seeking Council concurrence to commit these funds to the construction of a new Fire Station 63 at 71 Camaritas.
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BACKGROUND
On June 25, 2025, the City Council approved the sale of DNA Way, Point San Bruno Boulevard, and a portion of Cabot Road to Genentech for a purchase price of $25 million. The sale should close escrow by the end of 2025, at which point the sale proceeds will transfer to the City’s General Fund and be held in reserve until City Council appropriates or designates them for a specific use. These sale proceeds are unrestricted.
DISCUSSION
Allocation of these one-time funds to construct a place-making legacy civic building that will serve current and future generations with public safety amenities is a compelling use. Construction costs have continued to escalate over time; to delay replacement of this critical safety building will increase the amount of funding that will be required.
Fire Station 63
As thoroughly described in the October 29, 2025 staff report, “Report regarding a Fire Station 63 project update and two resolutions approving amendments to the Consulting Services Agreements with Kitchell CEM for program and construction management services and SmithGroup, Inc. for architectural design services for the Civic Campus Projects,” the City is in the process of designing the much-needed replacement station for Fire Station 63 currently located at the Municipal Services Building at 33 Arroyo Drive.
The current facility is significantly undersized and does not meet today’s standards for critical facilities. A grant funded remodel of Fire Station 63 was completed in 2012 that addressed various health and safety issues that had forced its closure on three separate occurrences since 2006. The remodel resulted in an improved living environment for the assigned personnel, including individual sleeping quarters, private bathrooms, and protection from water intrusion/mold and carbon monoxide. It also provided improved seismic protection for the assigned apparatus and increased the height of the apparatus bay to accommodate all department fire engines. The grant funding was limited and prohibited work to be performed outside of the fire station’s original footprint. This prevented the remodel from addressing key limitations, including sleeping quarters with two means of egress, adequate apparatus storage, support functionality space, in-station exercise area, storage for disaster preparedness supplies, drive-through apparatus bays, and decontamination corridors to limit carcinogen exposure in living areas.
The proposed future fire station site, 71 Camaritas Avenue, was purchased by the City in 2021 for $5.5 million, funded with Infrastructure Reserve funds, with the intent of constructing a replacement Fire Station 63 at that location.
The project is estimated to cost $37.3 million in total, in addition to what was spent to acquire the property. Nine million has already been appropriated from community benefits paid by Lane Partners in connection with the Southline Development Agreement near the San Bruno BART Station. This initial $9 million appropriation is funding project management and design work.
The project currently has a funding need of $28.3 million ($37.3 million minus $9 million already allocated). If $25 million from the Genentech sale is committed, plus the $9 million that was committed from Southline community benefits funds, this totals $34 million in available funding. This leaves a gap of $3.3 million needed to fund the completion of the station.
Several supplemental funding sources could be utilized to cover the $3.3 million gap. These include Public Safety impact fees, which grow at a rate of about $500,000 a year; the fund has an unencumbered cash balance of less than $2 million. Additionally, approximately $1 to $2 million in Measure W revenue is collected annually in excess of what is needed to repay existing bonds issued for the development of the Police Station, Library | Parks and Recreation Center, and Aquatic Center. Since replacement of the Fire Station was identified as one of the primary Civic Campus goals of Measure W, this would be a very appropriate source of funding.
To adhere to the current project schedule, funding for the new Fire Station needs to be in place by summer 2026. Per this schedule, the facility would open in late 2028.
FISCAL IMPACT
It is important to note that the $25 million from the roadway sale to Genentech, the fund balance of Public Safety fees, and Measure W accumulated funds, are not part of the General Fund operating budget, and are independent from the City’s budget forecasts. Allocation of funding for Fire Station 63 would not impact the General Fund. Dedication of these funds means that they would not be available for other one-time needs which the Council may wish to accomplish.
CONCLUSION
The City has multiple programs and projects that could benefit from an appropriation of the funds mentioned above. However, staff recommends that City Council prioritize the delivery of Fire Station 63 as a public safety amenity that was a significant, and to date uncompleted, phase of the Measure W initiative.
It is recommended that as part of the 2026/27 budget process, staff identify all available and potential funding sources, including scheduled and anticipated community benefit payments, impact fee funds, creative funding mechanisms such as the establishment of an endowment set-aside to fund non-profit services, and potential revenue measures. City Council priorities and updated budget forecasts should also be identified and considered to determine a budget strategy and work plan for the coming years.