WALNUT CREEK — Residents could one day live or work directly above where they buy their next car if an auto dealer’s proposal for mixing dealership office space with hundreds of housing units becomes a reality — an idea that city officials are open to exploring.

The City Council on Tuesday took the first step toward rezoning 10 parcels owned by Toyota to mix multi-family housing, hotel and other non-residential complexes with auto dealership uses. Plans are far from concrete, but the idea is that apartment units, hotel rooms or other office space would be constructed on top of dealership offices and car showrooms, with overall building heights capped at 50 feet.

The business at the center of the proposed change is Toyota Walnut Creek, which wants to expand its dealership property by six acres around its current location on North Broadway. At its core, Toyota’s mission is to build a prototype of a dealership that extends vertically — including, for instance, a showroom on the ground floor and a sales office above it. But the company doesn’t want to invest in the eventual dealership building complex alone.

“It’s an urban dealership; it costs a lot more to build, so we had to get creative,” said Stephen Scanlon of REAL Development, a San Diego real estate company applying for the zoning change on behalf of Toyota, at a meeting Tuesday. “(We’re) looking at more intensity of use — building a building with some ancillary uses above and a way to create a financial model that supports a much more substantial dealership by using the offset costs to help finance it.”

With a rezoning, the dealership could build several stories for other uses, potentially including up to 600 housing units across six acres.

Walnut Creek has long been a hub for auto dealerships, with more than 20 scattered around downtown. Auto sales account for a third of the city’s tax revenue, according to one official.

And while times are changing in the retail industry as the coronavirus pandemic leads more people to make their purchases online, a representative for Toyota Walnut Creek assured the council that an industrywide evolution away from in-person sales would likely move very slowly.

“The consensus is that auto dealerships will stay,” Scanlon said. “There’s still a desire to buy automobiles.”

“For high-purchase, high-dollar items like cars and houses … many people will do their research online but they will still want that in-person touch, feel and test drive,” said Teri Killgore, Walnut Creek’s assistant city manager. “So we don’t think that dealerships are going away in the near future.”

A conceptual look at what mixed-use, auto dealership and housing complexes could look like, as presented to the Walnut Creek City Council at a meeting on Tuesday. (Screenshot) 

New housing development is one part of Walnut Creek’s north downtown specific plan, an effort to revitalize the city’s urban core with more residents, as well as businesses that cater to them.

The specific details of the Toyota housing project won’t become spelled out for some time. An ad hoc committee of council members Cindy Silva and Cindy Darling will bring concrete details of a possible rezoning back to the council for consideration at a later date.

Flexibility is a primary ask in Toyota’s initial proposal. Scanlon explained at Tuesday’s meeting that the developer wants to determine certain project details, including size and scope, on the go as the post-coronavirus market for auto sales becomes clearer.

“We think this is a win for the city and a win for Toyota Walnut Creek,” he said. “We think we’ll increase the property tax base, support employment, boost pedestrian activity, and we hope we’re the start to a vibrant mixed-use district that marries these various non-conventional uses together.”

Making the the north downtown area’s housing denser with more residents will also require pedestrian-friendly streets and walkways, improvements that the developer said it would be interested in creating, especially since the dealership is less than a mile away from the Walnut Creek BART station.

There aren’t too many real-world examples of the kind of mixed-use dealership complexes that the developer is looking to build — “largely because it’s a new problem to solve,” said Peter Stackhole of LCA Architects, a Walnut Creek firm in charge of design.

Councilwoman Loella Haskew said she was excited about the new proposal, saying it was a “chance for Walnut Creek to break out of the mold of, ‘We continue to do business as we have done for the last 30 to 40 years.’ ”

“This is a really glorious opportunity for us to move a paradigm into the modern world,” Haskew said.