SAN MATEO -- The City Council late Thursday overruled a hotly disputed staff decision on a planned 7-Eleven store near the Burlingame border, setting in motion comprehensive hearings on the controversial subject.

The council found itself caught between dozens of upset citizens and high-powered attorneys at a contentious meeting about the proposed store at 501 N. San Mateo Drive.

More than a hundred people packed council chambers, the vast majority of them San Mateo Heights residents who oppose the 7-Eleven. The store is preparing to open after the city earlier this year awarded the property owner a building permit for renovations. The neighbors claim the store would cause health and traffic problems, increase crime and hurt property values.

Several neighbors who addressed the council argued the city's approval of the permit had been based on faulty reasoning and a curious reversal by city staff, which had initially opposed the project.

"Was there improper influence exerted on anyone at City Hall?" asked Jeanne McCarthy. "The process has been opaque at best."

Dick Givens, an attorney for property owner Portfolio Development Partners LLC, said before the council voted, "The city cannot go back on its word."

What seems like a simple issue -- whether 7-Eleven is a good fit for the San Mateo Heights neighborhood -- turns out to be a highly complex matter, marked by zoning-code jargon and conflicting interpretations by the city of its own regulations.


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The saga began when an Italian deli named Stangelini's closed in 2010. The property was zoned for residential purposes, but it had been in use as one market or another since the 1920s, before the city's zoning laws were written. So the site had been exempt from its zoning designation and considered a "legal nonconforming use."

When the market had been out of business for six months, however, city code appeared to require that any future use of the property be residential.

And that's exactly what a city planner, who consulted an assistant city attorney, determined in 2011. But just a few months later, a different planner consulted a different city attorney, who reached a different conclusion.

The new interpretation provided that the property would revert to residential use only if there was evidence the owner intended to abandon it. The neighbors have criticized the interpretation as shoddy.

Under this second reading of city code, the property would be able to continue as a market without a special permit. Portfolio Development Partners purchased the property for slightly more than $1 million on the basis of that opinion and went ahead with plans to install a 7-Eleven.

The neighbors, outraged by the apparent circumvention of the city's bylaws, intensified their campaign against the new market, eventually getting the attention of the City Council.

The council voted 4-0 on Thursday to initiate further Planning Commission and City Council hearings on whether the contested property should revert to a conforming use.

The property owner stands to lose anywhere from $120,000 to $8.6 million if the city ultimately shoots down the market.

Contact Aaron Kinney at 650-348-4357. Follow him at Twitter.com/kinneytimes.