Scottsdale, Ariz.-based developer DMB Associates has submitted plans to develop 1,433 bayfront acres in Redwood City, Calif., in the heart of Silicon Valley. Half of that land would be used for a massive mixed-use project that could include up to 12,000 homes.

DMB wants to break ground on this project by 2013, but has a long road ahead before it gets to entitlement, as this redevelopment will require approvals from local, state, and federal regulatory agencies. It could face other challenges from environmental groups.

Before revealing details about its plan last month, DMB and Cargill Salt—which has owned this land since 1978 and is partnering with DMB in its redevelopment under the limited liability corporation DMB Redwood City Industrial Saltworks—spent nearly three years soliciting comment from the community about their project. The partnership’s Web site claims that 80% of the more than 10,000 local residents who “helped shape the plan” favor “a broad mix of uses” on the site.

The redevelopment proposes that half of the Saltworks, a 2.2-square-mile salt-harvesting property, would be preserved for permanent open space, public recreation, and tidal marsh restoration. DMB plans to convert the other half into a transit-oriented community with housing, schools, parks, offices, and retail. On their Web site, the partners claim this redevelopment wouldn’t cost existing taxpayers any money, would provide greater public access to the bay, and would have its own water supply. The saltworks sits atop a large aquifer, and its proposal speaks of implementing water conservation programs devised by the San Francisco Public Utility System that could reduce the community’s per-household potable water use by 50%.

Water availability will be critical for the nine counties that comprise this region, whose populations are expected to increase by nearly 2 million people by 2035, according to the Association of Bay Area Governments. But any future development must take into account California’s new climate change law that mandates significant reductions in greenhouse gases, the greatest cause of which is vehicular traffic.

“One of the reasons why real estate in California is devalued right now is because of all these subdivisions that were built 50 miles to 60 miles from job centers when gas was cheap. Now they’ve become environmental disasters,” says John Bruno, president and general manager for Redwood City Industrial Saltworks.

To get more people out of their cars and onto mass transit, DMB is proposing the creation of a light-rail or trolley line from the bayfront to downtown Redwood City, a mile away, where commuters could then link to the train system that connects San Jose with San Francisco. Bruno tells BUILDER that Redwood City is also under consideration for inclusion in a burgeoning ferry system (although that would be funded by the state, which is financially precarious at the moment).

The community itself, as proposed by DMB, would have seven neighborhoods, each with 1,000 to 1,500 units of housing, all of them attached. The densities would range from 12 units per acre for townhouses, 20-40 per acre for condos, and 40-80 per acre for rental apartments. There would be four to five different products per community, and 15% of the homes would be priced affordable, using San Mateo County measurements. The community would also include five schools, as well as 200 acres of parks and open space.

(Bruno couldn’t provide estimates about what the homes might be priced at. But the San Mateo County Association of Realtors estimated that the median house price for the county in May was $728,000.)

DMB also envisions 1 million square feet of Class A office space, as well as retail space that would serve the community. Bruno says DMB and Cargill can’t put a price tag on this project yet because some details are still being worked out. “But it’s going to be in the billions of dollars for the infrastructure alone.”

All of this sounds to good to be true to David Lewis, executive director of Save the Bay, a nonprofit environmental group based in Oakland, Calif. In an interview with BUILDER last week, Lewis said his group prefers that the entire property be restored as a wildlife habitat and is urging Cargill and DMB to find another site “that’s closer to the urban core and closer to transit.” Last year, this group was instrumental in getting Measure W on the ballot, which would have required two-thirds of the city’s voters to approve the development of the salt ponds and any open space. That measure was rejected 63% to 37%.

Lewis told the San Jose Mercury News, where DMB’s redevelopment plans were first reported, that his organization hasn’t ruled out lawsuits or ballot referendums to stop DMB’s plans. However, he told BUILDER that even if Save the Bay did nothing, “this project has multiple hurdles to overcome: local, state, and federal.” The developers will need clearance from the city to build residences on this salt pond, and will require approval from a host of government agencies, including the Army Corps of Engineers, the EPA, and the U.S. Fish and Wildlife Service. As Lewis summarized, “What we’re trying to do is to highlight that this is not a good place for housing and that regulatory barriers exist."

Bruno dismisses environmental groups like Save the Bay as resolutely anti-growth and insists that redevelopments such as the one DMB is proposing are essential and responsible. “The only way that Silicon Valley will continue to thrive is if we have housing, and if we change the housing paradigm," said Bruno. He acknowledged that if the redevelopment moves forward as planned, it would be timed “for the next up cycle.” But he conceded that the economy is still a question mark, and that any developer must ask “how long is this trough?”

John Caulfield is senior editor for BUILDER magazine.