WALNUT CREEK (BCN/CBS SF) — The Walnut Creek City Council on Tuesday unanimously decided to move forward with Toyota Walnut Creek to explore rezoning six acres north of Ygnacio Valley Road into mixed-use buildings with multiple floors of housing or hotel rooms over auto facilities.

Councilmembers Cindy Silva and Cindy Darling, both former city planning commissioners, will head an ad hoc committee working with Toyota on a development agreement with the city.

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“I think this is exciting; it’s forward thinking,” said Silva. “It will kickstart the improvements in the North Downtown Specific Plan area.”

“It will bring the vision of the future about auto sales and service into Walnut Creek in a way that allows it to be financially viable at the same time meeting some other needs, potentially, that we might have in the transit-oriented environment,” Silva said.

Toyota representative Stephen Scanlon said the carmaker would consider this project a prototype for dealers nationwide. The pandemic has altered the way auto dealerships do business, which is becoming more online-centric, requiring less on-site space for inventory.

Since about a third of Walnut Creek’s sales tax revenue comes from auto sales — and cities are looking for ways to increase housing density, especially near transit — mixed-use spaces are a logical answer.

City staff said expanding vertically in the area could more than triple the current taxable acreage, from 6 to 20 acres. And, while Walnut Creek currently meets state housing goals, required numbers are expected to increase significantly after 2022, according to a city report.

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“We really hadn’t though outside the box the way that this conversation has caused us to think,” said councilmember Matt Francois. “I do believe that this project could be a catalyst and a model for other dealerships to remain in Walnut Creek, remain viable, to help us meet our housing needs in an area that’s in close proximity to BART and also see the rest of the plan area get developed.”

The area now encompasses 10 parcels over six acres, fronting both sides of North Broadway on the east side of North Main Street, south of Pine Street. The Toyota dealership at 2100 North Broadway would remain, though adjacent parcels would be affected.

Though officials from Toyota showed slides of mixed-use possibilities — including hotel rooms, and apartments over ground level auto showrooms and other retail uses — the dealership hasn’t officially submitted any studies or plans for the redevelopment project. The proposal, so far, conceptualizes 600 residential units, should the city choose to go that direction. Building heights couldn’t exceed 50 feet.

To move forward, the city would have to rezone the land — currently zoned for auto sales and repairs — and amend its general plan, as well as its North Downtown Specific Plan. The project would likely be subject to city design review, as well as state environmental review, which could take anywhere from six months to a year. The planning commission would also have to approve it before it went to the City Council for a final decision.

Members of the council said the project offered opportunities to increase pedestrian access to BART and perhaps an opportunity for city auto dealers to collaborate on inventory space.

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