A new plan for the second phase of the Bay Meadows development in San Mateo is up for community approval.

"The revised plan is more in the ballpark of what the City Council and the Planning Commission thought it should be," said Bob Beyer, director of community for the City of San Mateo. "It's a better project."

The new plan includes 1.25 million square feet of office space, and 1,250 units of residential space. San Mateo officials rejected an earlier plan with twice as much office space, and 200 fewer residential units following a drop in office leasing rates and a rise in the housing market. In addition, many area residents said they wanted more space for homes and parks, city officials said.

"Bay Meadows can become an example of how we can fight sprawl with high-quality, higher density neighborhoods with good public infrastructure," said Chris Meany, managing partner at Wilson Meany Sullivan, which is managing the project for Bay Meadows Land Co.

Bay Meadows has been cooperative, said Larry Patterson, director of public works for the city of San Mateo: "I think they are doing what they can to move toward a project that is acceptable to the community."

The plan for the site revolves around the nearby Hillsdale station, one of four Caltrain baby bullet stops between San Francisco and San Jose. Meany said the second phase of the plan is based on a network of pedestrian-friendly streets that can accommodate different uses.

The plan also calls for a main street retail environment near the new Caltrain track and a 15-acre park system.

The race track will be eliminated once construction begins on the next phase.

The first phase of the development project, already under way when Bay Meadows Land Co. purchased it in 1997, is now fully rented. The 75-acre site includes 320,000 square feet of office space, and 785 units of housing and commercial space.

Park Place at Bay Meadows, which is on seven acres, includes office tenants such as Commercial Capital Bank, Cargill Ventures, Dorado Corp. and Marketocracy -- as well as Bay Meadows Land Co. headquarters.

Retail tenants include Gold's Gym, Peet's Coffee & Tea, T-Mobile, Stilo Salon and Whole Foods Market. The city purchased two acres of Phase I land for a new police station. Plans for a hotel were scrapped.

"After Sept. 11, the demand for hotel space is not as robust as one might hope," Meany said.

Bay Meadows developers say that if the plan is approved by the end of the year, construction could begin as early as 2007 and would take 10 to 15 years to complete.

Although the San Mateo City Council and Planning Commission won't start looking at the project's environmental impact report until next month, Beyer of the City of San Mateo said the plan is likely near approval.

"There still might be some time to tweak it," Beyer said. "But the design seems great for the city."

The San Mateo Corridor Joint Powers Board, the authority that operates Caltrain, has proposed moving the Hillsdale station a quarter mile north from its current site at El Camino Real and Hillsdale Boulevard to be adjacent to the Bay Meadows project area.

Patterson said that while changes in the project are consistent with input from the Citizen's Advisory Committee, he said it's too soon to tell if it will be approved: "There is one thing that you learn working on projects like this -- not to predict how the process will move forward when there is community involvement."