The City of Milpitas has adopted an ambitious specific plan for the heart of town, yet the city's approach to implementing the plan relies heavily on private investors. The plan calls for thousands of new housing units in densities of at least 30 units per acre — a remarkable change for a city of 65,000 that has grown up mostly as a single-family-home suburb. At the same time, the city's redevelopment agency (the entire specific plan area lies in a redevelopment project area) is mostly focused on basic infrastructure rather than on acquiring and assembling land for development. Located between San Jose to the west and Fremont to the northeast, Milpitas has always been something of a crossroads. Interstate Highways 880 and 680 carry hundreds of thousands of vehicles per day through Milpitas. Highway 237, which is a boulevard through Milpitas, has long been an important link between 880/680 and the Palo Alto area. And the town is the site of a Union Pacific rail yard. The midtown specific plan that the city adopted in 2002 actually builds on the crossroads traits, but in a 21st century fashion. Two stations for the Tasman East Light Rail Transit line are under construction and are scheduled to open in Milpitas next year. The light rail will connect the southern end of midtown Milpitas with downtown San Jose and other parts of Santa Clara County. And Milpitas is scheduled to get a BART station when BART is extended from Fremont to San Jose later this decade. Those transit stations, and a second BART station for which the city is lobbying, provide the centers around which high-density housing is planned. And the residents of those housing units are essential to the success of the midtown plan, explained James Lindsay, acting planning manager. "That critical mass of housing is what's important," he said. During much of the 1970s, ‘80s and ‘90s, Milpitas paid little attention to its traditional core. Today, the midtown thoroughfares of Main and Abel streets sport extensive strip commercial development with abundant surface parking, numerous mom-and-pop retail and service businesses, some vacant parcels, and a mishmash of housing. "The legacy is that the homebuilders built on the periphery, the shopping centers went up by the freeways, and the downtown was forgotten," said Allen Folks, a principal for EDAW, Inc., who helped write the midtown specific plan. Folks said midtown has a great deal of underused real estate. Over the years, the city made a number of attempts to generate new life on Main Street, but "nothing seemed to work well," Lindsay said. He figures part of the reason for the failure of past attempts was that they were not city-wide efforts. In 1998, voters approved a city-sponsored ballot measure that established a tight, 20-year urban growth boundary and essentially halted annexations (see CP&DR, December 1998). At the same time, city leaders still wanted to stimulate economic growth. "Infill development really was the only way that was going to be accomplished. Suburban sprawl wasn't going to be permitted," Lindsay said. So the city took a new look at its traditional core and in late 1999 began the planning process that led to adoption of the specific plan. This time, the city reached out broadly to the public. The city conducted 10 meetings that were heavy on public participation. When it came time for the City Council to adopt the specific plan last year, the hearings were smooth and the public opposition was muted. Most of the opposition came from midtown business owners who lease space for car repair shops, car washes and other small enterprises. The business owners feared the city plan would make the real estate too valuable for their leases. The community acceptance of the plan can be seen in a proposed library expansion. The current library lies in a civic center complex across the railroad tracks from midtown. Voters backed a hotel tax increase to fund expansion of the library. But rather than expand the library at its current location, library supporters want to reuse a historic grammar school building at the north end of midtown. The specific plan calls for 4,860 housing units, 720,000 square feet of office space, 300,000 square feet of "general commercial" and 61,000 square feet of new retail, plus 48 acres of parks and extensive off-street pedestrian and bicycle paths. The focus of the plan is twofold: a mixed-use pedestrian district along Main and Abel streets, and high-density housing around transit stations. The plan recently won a comprehensive planning award from the California Chapter of the American Planning Association. While the plan contains some notions common to downtown revitalization, the planning area is atypical. In fact, three things that could be considered major constraints affect the area: an automobile-oriented shopping mall, a rail yard and transfer facility, and the county jail. The Great Mall shopping center is at an old Ford auto assembly plant. The city subsidized the reuse during the mid-1990s, and the mall continues to generate sales tax revenue. Although the mall does not match the pedestrian- and transit-orientation of the specific plan — and the city left the mall out of the specific plan area — the city chose to see the mall as a midtown asset, Lindsay said. The mall can anchor the midtown's south end and help draw people to a part of town they might otherwise ignore, he said. The rail yard and transfer facility are still in use and divide the town into an east side and a west side. The plan designates the rail site as "manufacturing and warehouse," but there is a transit-oriented development overlay zoning and city officials clearly would like to see the area redeveloped in a way that connects midtown with the newer parts of town east of the rail line. Lindsay said the city will simply have to wait until Union Pacific, which is considering development on a number of its rail yards elsewhere, decides the Milpitas property would be worth redeveloping. The Elmwood Correctional Facility also lies within the specific plan area. City officials acknowledge they have to live with the 2,500-inmate jail, but earlier this year the city ensured the jail will get no bigger. The city agreed to pay the county $135 million for 35.5 acres of county-owned land near the jail. The city envisions a 6.5-acre park on one parcel, and up to 700 housing units (20% of which would go for less than market rate) on two other parcels. KB Homes has an exclusive negotiating right to develop the housing. And KB is not the only developer interested in midtown Milpitas these days. Santa Ana-based RJC recently developed 450 townhouses near the Great Mall and now has entitlements to develop 282 more units — including 58 restricted to very low-, low- and moderate-income buyers — on 7.3 acres. The units will be 1,000 to 1,400 square feet apiece, with two-car garages, said RJC Chief Executive Officer Jim Murar. Although Silicon Valley has lost hundreds of thousands of jobs during the last three years, "the market has remained relatively constant at the levels we are talking about," Murar said. "We hope to be at a lower price point than anything else in Santa Clara County." That means selling units for less than $400,000. The key to controlling the sale price is density, said Murar, who hopes to do more business in Milpitas in the future. Despite the developers' interest, most of the specific plan area looks just the same today as when the city adopted the plan in March 2002. The city is preparing for a tax increment financed bond to fund a new streetscape on Main and Abel streets, utility undergrounding, the library project and acquisition. Except for the surplus county land, the city appears to have no other plans for real estate acquisition from willing sellers or otherwise. Some properties are starting to come onto the market, and potential developers are beginning to undertake their own land assemblies, Lindsay noted. Folks, of EDAW, believes the city has a good long-term plan. "They have to be patient, and they can realize the fruits of their endeavors," he said. Contacts: James Lindsay, City of Milpitas, (408) 586-3274. Allen Folks, EDAW, (916) 414-5800. Jim Murar, RJC Development, (949) 553-0627.