Commercial Real Estate in Sausalito: Bridgeway, Waterfront Districts and the Marinship

By Matthew Martinez, Founder, CEO & Managing Broker, Diamond Real Estate Group. California DRE #01869679.

Sausalito’s commercial property runs in a narrow band along Richardson Bay. It covers the visitor-heavy downtown on Bridgeway, neighborhood shops at Caledonia Street, waterfront restaurants and marinas, and the Marinship, a former shipyard now zoned for marine industry and the arts. The city’s zoning code, Title 10, is unusually protective of maritime and local-serving uses. Confirm the base district and any overlay for each parcel with Sausalito Community Development before relying on this page.

Who controls the parcel

Inside city limits, the City of Sausalito regulates land use under Title 10. Marin City, just north across Highway 101, is unincorporated and follows Marin County’s Title 22, which is covered in our Marin County commercial guide. Parts of the waterfront and houseboat areas beyond the city line are also county jurisdiction. Under Section 10.28.030, when an overlay conflicts with the base district, the overlay controls. That matters in the Marinship, where every parcel carries the -M overlay.

Sausalito zoning for commercial, industrial and mixed use

Chapter 10.24 was last amended by Ordinance 03-2026 in March 2026. It sets six commercial and waterfront districts. Chapter 10.26 adds the Industrial Marinship district.

District	Intended uses	Notes
CC Central Commercial	Retail and services for residents and visitors, with housing upstairs	Restaurants permitted. Visitor-serving stores, hotels, B&Bs and bars by conditional use permit. 1 to 6 housing units permitted
CR Mixed Commercial and Residential	Local-serving retail and services in a pedestrian setting, with compatible housing	Restaurants and bars by use permit
CN Neighborhood Commercial (CN-1, CN-2)	Convenience shopping for nearby neighborhoods	Hotels and B&Bs by use permit. Housing upper floors only in some areas
SC Shopping Center	Household necessities for residents	The only district allowing formula retail. 10,000 sq ft minimum parcel
CW Commercial Waterfront	Uses that need a waterfront location	Restaurants permitted. Beer and wine only as an accessory use
W / W-M Waterfront	Marine-oriented uses, harbors and marinas	25,000 sq ft minimum parcel. W-M also falls under Marinship rules
IM Industrial Marinship	Low-intensity marine industry, arts, support services	0.40 FAR, 50% coverage, 32 ft. No new commercial offices except accessory

Most commercial districts require a 5,000-square-foot minimum parcel and 50 feet of width. Seven or more housing units in CC, CR or CN need a conditional use permit.

Downtown Bridgeway, Caledonia Street and the waterfront

Storefront rules. Under Section 10.24.040, a retail business with more than 50 feet of frontage on one street needs a conditional use permit, measured tenant by tenant. Corner stores face the same test on their primary frontage. Fast-food drive-thrus are banned in every commercial district. Most activities must be indoors, and outdoor dining needs a minor use permit. Incidental manufacturing tied to a shop’s merchandise is allowed up to half the floor area and five employees. This is useful for makers who sell on site.

Formula retail. Chain stores are permitted only in SC, subject to Section 10.44.240. A national tenant on Bridgeway or Caledonia Street is generally not an option, which changes how a downtown building can be leased and valued.

Housing near Bridgeway. The CN rules allow upper-floor housing along Second and Main Streets and around Bridgeway and Spring Street. They bar housing on Bridgeway between Coloma Street and Ebbtide Avenue.

The Marinship, historic districts and housing overlays

Marinship. The -M overlay carries out the Marinship Specific Plan of April 5, 1988. It aims to keep the area’s maritime and industrial character and to favor residents over tourists. It bars new recreational marinas and a ferry terminal, limits dry boat storage to 100 berths per acre and caps height at 32 feet. In the IM district, marine industry, marine R&D, boat storage and fine, industrial and marine arts are permitted. Offices that existed before April 5, 1988 may stay, but new commercial offices are limited to accessory use. Commercial uses, including offices, services and restaurants, may not exceed 40% of permitted floor area and must be paired with approved non-commercial uses. Existing homes in the Marinship may remain but cannot expand. A buyer cannot plan to turn a Marinship warehouse into general office space.

Historic overlay. In -H districts, exterior changes need a certificate of appropriateness under Chapter 10.46. Exterior permits can be held for 180 days after a designation is initiated.

Housing Opportunity overlay. Adopted by Ordinance 06-2025-A on December 2, 2025, -HO creates six zones from H-29 to MU-70. They cover Housing Element sites such as 925 Bridgeway Boulevard and parcels on Nevada Street and San Carlos Avenue. Projects must include at least 20% lower-income units. In the mixed-use zones, buildings must be at least 85% residential, with non-residential FAR up to 0.4.

Lodging. Hotels and B&Bs need a conditional use permit in CC and CN. Sausalito’s Chapter 5.16, updated in October 2025, bans renting homes for 30 days or less. Licensed hotels, motels and B&Bs are therefore the only legal short-stay lodging.

Transfer tax, business tax and property tax

Sausalito’s Chapter 3.08, adopted in 1967, sets a city transfer tax of $0.275 per $500, excluding liens remaining on the property, administered by the County Recorder. The Recorder’s transfer tax sheet lists the county’s $0.55 per $500 and names only San Rafael with an added city tax. A city tax at half the county rate under state law is normally credited against the county’s, so confirm with escrow how the two are split. Hotel guests pay a 14% transient occupancy tax, raised from 12% by voters on November 6, 2018. Businesses need a city license under Chapter 5.04. A sale generally triggers Proposition 13 reassessment.

Due diligence that matters in Sausalito

Start with our commercial due diligence checklist, then add:

Confirm the base district and any -M, -H, -HO or -Pd overlay. The overlay wins where they conflict.
For Marinship property, document which offices existed before April 5, 1988 and calculate the 40% commercial share.
Test any chain tenant against the SC-only formula retail rule before signing a letter of intent.
Check storefront width against the 50-foot rule for retail.
For bayfront parcels, review tidal, flood and pier permits, including any agencies with jurisdiction over the water.
Budget the hotel tax and the ban on short stays in any lodging plan.

Questions people ask

Can a national chain lease a Bridgeway storefront?

Generally no. Formula retail is permitted only in the Shopping Center district.

Can I convert a Marinship building to offices?

New commercial offices are limited to accessory use. Offices that existed before April 5, 1988 may continue, and commercial uses together are capped at 40% of permitted floor area.

How tall can buildings be in the Marinship?

32 feet. Taller buildings are possible only by use permit for heavy marine industry or remodeled historic structures.

Does Sausalito have a transfer tax?

Its code sets $0.275 per $500, excluding liens. Confirm with escrow how it applies against the county’s $0.55.

Are short-term rentals allowed?

No. Renting a home for 30 days or less is banned, with fines of up to $5,000. Hotels, motels and B&Bs are excluded from the ban.

What is the hotel tax?

14% of room rent since the November 2018 vote.

Can I add apartments over a downtown shop?

Yes. One to six units are permitted in CC, and seven or more need a use permit. Housing Opportunity sites allow more.

Does Diamond handle commercial property in Sausalito?

Contact Matthew Martinez to discuss buying, selling or leasing commercial property in Sausalito.

Sources & notes

Note: We did not read the FAR and height table for the commercial districts, the Marinship Specific Plan, Section 10.44.240 or business license rates.

This page is general information, not legal or tax advice. Last reviewed October 2026 by Matthew Martinez.

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