Special Notice / Hearing: Publication (3 weeks)
Vote Required: Majority
To: Honorable Board of Supervisors
From: Michael P. Callagy, County Executive
Subject: Purchase and Sale Agreement for the Acquisition of 1501-1521 Bayshore Highway, 1533-1545 Bayshore Highway, and 818-826 Mahler Road, in Burlingame
RECOMMENDATION:
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Adopt a resolution:
A) Declaring the Board of Supervisors’ intent to purchase the real property described as 1501-1521 Bayshore Highway, 1533-1545 Bayshore Highway, and 818-826 Mahler Road, in Burlingame, identified as San Mateo County Assessor’s Parcel Number 026-321-440 (“Property”), for a total purchase price of $13,000,000; and
B) Authorizing the President of the Board of Supervisors to execute a Real Estate Purchase and Sale Agreement and Escrow Instructions (“Agreement”), with the owner of the Property, The Lovotti Family Trust (“Seller”), for the County’s acquisition of the Property; and
C) Authorizing the County Executive or their designee to execute the Certificate of Acceptance upon satisfaction of certain conditions in escrow, to be recorded with the grant deed transferring title to the Property to the County, as well as an Assignment of Leases and any and all notices, escrow instructions, and documents required to facilitate the purposes of the Agreement.
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BACKGROUND:
The San Mateo County Behavioral Health and Recovery Services Division (“BHRS”) lost a key component of its substance use continuum of care when its 14-bed Sobering Center closed in May 2025, creating significant strain on law enforcement, hospitals, and community member seeking safe stabilization. This sobering station, previously operated by Star Vista, was in operation for many years at 818-826 Mahler, until StarVista went out of business. This location is convenient and centrally located for police agencies. It is believed the sobering station could be reopened within months of purchase.
Additionally there is a need in the community for dedicated office space for the Pride Center and other County nonprofits that are burdened by unpredictable and high rent office space.
Moreover, Palm Avenue Detox, a longstanding provider operated by Horizon Services, Inc. (“Horizon”), faces facility and sustainability challenges due to updated American Society of Addiction Medicine (ASAM) Criteria and California Advancing and Innovating Medi-Cal (CalAIM) payment reforms, which require integrated residential withdrawal management services and larger-scale operations. In response, the County and Horizon identified the need for a new, centrally located integrated campus, leading to Horizon’s proposal under the State’s Behavioral Health Continuum Infrastructure Program (BHCIP) Round 2 to develop the Palm Recovery Center at 101 North El Camino Real, in San Mateo. The planned 58-bed campus, comprising Sobering Center, Withdrawal Management/Detox, and Residential Treatment beds, would restore lost sobering services, expand detox and treatment capacity, and improve client outcomes through a seamless continuum of care.
Although there is broad public support for expanding access to addiction treatment services in San Mateo County, a question remains regarding the viability of the San Mateo location. There remains an outstanding question as to whether the San Mateo site is the best location for the Horizon project, given that the site will be more difficult for police to access when dropping off sobering clients. There also remains a question as to the viability of the San Mateo site given the small parcel size and traffic at the propsed intersection.
In light of the County’s need for a site on the mid-Peninsula that will accomodate multiple uses, staff has identified and proposes the Property, a parcel of land consisting of approximately 94,711 square feet of space and containing three buildings totaling 34,478 square feet, as an alternate location for Horizon’s Palm Recovery Center, for the Pride Center, and for nonprofit uses at reduced rent. This facility is located in an industrial area, and as mentioned, previously housed StarVista’s First Chance residential detoxification program.
DISCUSSION:
The County has determined that the Property would be an appropriate facility for nonprofit operations at a reduced rental amount so nonprofit organizations could stabilize their budgets. The Pride Center is also in need of a physical location so it can serve clients and apply for grants. The Pride Center lost their previous lease and currently does not have office space. They are missing out on grant opportunities due to the fact it is unable to meet with or serve clients in person.
The Property could also be utilized for the Horizon Palm Recovery Center, which would provide Horizon with more space and better parking, and the Property could be deed restricted for a substance abuse treatment facility, thereby allowing a continuum of services in San Mateo County even if Horizon ultimately chooses to leave the County.
County staff desires to purchase the Property at a price reasonably aligned with its fair market value. Though several potential uses have been outlined above, these are not exclusive possible uses of this property. Given this Property’s size and location, it is well positioned to serve a variety of County needs, including future warehouse needs and administrative offices.
The Seller has executed a Real Estate Purchase and Sale Agreement and Escrow Instructions (“Agreement”), proposed by the County Executive, for the purchase price of $13,000,000. The Agreement provides that, upon completion of the County’s investigation of the Property (“Due Diligence Period”) and satisfaction of all conditions, the transaction close would occur within thirty-seven (37) days of Board approval, or upon a mutually agreed upon extended close of escrow date.
Acquisition of this Property was evaluated for sea level rise impacts in accordance with the San Mateo County Sea Level Rise Policy for County Assets, which requires evaluation of sea level rise risk at least 50 years beyond the date of acquisition. Based on a review of inundation maps during this time horizon, this Property may be at risk of flooding with 3.3 feet of sea level rise and a 100-year storm event. The City of Burlingame’s sea level rise planning documents do not provide for a strategy of retreat from current land uses along the bayfront, and the County’s proposed uses of the Property are consistent with existing commercial development and uses in the vicinity.
The County’s acquisition and use do not involve placing new structures in an undisturbed area not already at risk and does not increase any risk of harm to persons or property above present levels. No part of the Property is within the shoreline setback area established by the City of Burlingame’s sea level rise planning documents; therefore, the acquisition will not negatively impact the region’s ability to create a shoreline buffer or accommodate other shoreline defenses against inundation. The County’s proposed use will not involve the installation of critical infrastructure that may become inaccessible during a temporary inundation event. Future development of this property will include a sea level rise risk assessment and adaptation plan.
Notices pursuant to California Government Code section 25350 of the intention of the Board of Supervisors to make this purchase were published in compliance with Government Code section 6063, including a description of the Property to be purchased, the price, the vendor, a statement of the time the Board would meet to adopt this Resolution and consummate the purchase, and an invitation to interested persons to attend and be heard on the subject.
Pursuant to Government Code Section 65402, the City of Burlingame has been notified of the proposed purchase of the Property and has been requested to issue a finding of conformity with the City’s General Plan.
The County Attorney’s Office has reviewed and approved the Agreement and resolution as to form. The County Executive Officer concurs in this recommendation.
COMMUNITY IMPACT:
The County is dedicated to providing access to critical services for vulnerable individuals and acquiring and leasing real property to ensure all residents can access services in the locations and facilities best suited to their specific purposes. This acquisition will further the County’s ability to ensure that critical services for residents can continue to be provided.
FISCAL IMPACT:
The purchase price, including closing costs, have been appropriated in Non Departmental Services FY 2025-26 Adopted Budget and will be paid by the General Fund.