HAYWARD -- A proposal to replace the long-closed Mervyn's headquarters downtown with housing has been scaled back yet again, with fewer townhouses and no rentals in response to neighbors' objections to larger development plans.

"The changes were made primarily to address concerns of Prospect Hill residents and the views expressed by the council," said Mark Butler, vice president of acquisitions for the project's developer, Integral Communities.

The project, called @The Boulevard, calls for three stories of 194 townhouses, instead of the original 570, and most would have three bedrooms with individual decks. The project also has a retail component of 16,800 square feet, an increase from earlier an earlier plan, and a lighted public pathway along the San Lorenzo Creek flood control channel.

The former headquarters for Mervyn’s department stores is shown June 26, 2013, in Hayward.
The former headquarters for Mervyn's department stores is shown June 26, 2013, in Hayward. (Aric Crabb/Staff file)

The city Planning Commission will consider the most recent proposal for the 11.3-acre site Thursday.

Despite the changes, the project still is opposed by the Prospect Hill Neighborhood Association, said Mike Urioste, association president.

"The revised plan is better, but it still does not meet what the site was originally zoned for," he said. "It's supposed to be zoned commercial."

Potential for commercial development on the site is "limited," according to the staff report.

"It sat vacant for five years with a for-sale sign in front of it," Butler said.

Integral wants to raze the existing four-story, 336,000-square-foot structure -- built in 1957 as an Emporium-Capwell department store. The building has sat vacant since 2008, when the Mervyn's retail chain went out of business.

In addition the headquarters building, a four-story parking garage also would be torn down. The townhouses would have garages on the first floor, and additional surface parking. The development would have a total of 585 parking spaces, with 53 of those for retail or commercial use.

Because the site slopes downhill to San Lorenzo Creek, only the top two floors would be visible from Foothill, according to the staff report.

None of the townhouses would front Foothill, Butler said. Instead, the commercial/retail buildings would create a buffer, with separate parking, he said. "We've created a mixed use," he said.

The area on the northern edge of downtown is zoned for retail or commercial on the ground floor, with housing or offices allowed above the first floor. A conditional use permit is required for ground-floor residential, said David Rizk, Hayward's director of development services.

Integral Communities' latest proposal adds a lighted public pedestrian/bike path next to the San Lorenzo Creek flood control channel. It which would run the length of the parcel from Hazel Avenue to City Center Drive.

"During our outreach effort, we learned that nearby residents use this passageway, and we wanted to maintain that," Butler said.

The Mervyn's site also is within walking distance of the Hayward BART station. Cities throughout the area are being encouraged by regional planners to have higher-density housing near BART and other transit stations, Rizk said.

"There is a regional push to have more development around transit facilities," he said.

Other transit-oriented high-density projects in Hayward include more than 350 apartments near the South Hayward BART and the Cannery area, with more than 800 townhouses within walking distance from Hayward BART. In September, the City Council approved 60 senior apartments on A Street near Mission Boulevard.

Urioste said he objected to the change in the focus of local development.

"Areas zoned commercial are being converted to high-density housing," Urioste said. "Whatever happened to single-family housing, with a front and back yard? This high-density housing is just ridiculous."

The townhouses would likely sell for $518,000 to $608,000, according to the staff report. Buyers would be young professionals and families, with an average household income of $133,600.

"We view it as an opportunity to enhance downtown Hayward by providing families who can enjoy the benefits of downtown living, including dining, shopping and transportation," Butler said.

Hayward Planning Commission
What: Consider Integral Communities' request for a conditional use permit for 22301 Foothill Blvd.
When: 7 p.m. Thursday
Where: Hayward City Council chambers, 777 B St.