Commercial Real Estate in Sunol: The Downtown SD District, Agricultural Uses and Septic Limits

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

Sunol is a small unincorporated village in the canyon country between Fremont and Pleasanton. Commercial property here is scarce and mostly sits in one place, the historic downtown near Niles Canyon Road and the railroad. Outside downtown, business use means agriculture, wineries, stables and visitor uses on large rural parcels, under Alameda County zoning and Measure D. Every use depends on county approval and, usually, a septic system, so confirm both before you commit.

Who controls the parcel

Alameda County regulates all land use in Sunol through Title 17 of its Ordinance Code. The community also has the Sunol Citizens’ Advisory Council, which the county and community set up to give residents more say in local decisions. Under the county code, the council reviews downtown projects before the county decides them.

Large parts of the Sunol Valley are owned by the San Francisco Public Utilities Commission as watershed land. The county’s Measure D review notes that the East County Area Plan puts the Sunol Watershed in a Water Management designation, generally with a 100-acre minimum parcel size. Groundwater policy comes from Zone 7 Water Agency. See our Alameda County commercial guide for the wider county context.

Sunol zoning for commercial and business use

District or designation	What business use is possible	Key limits
SD Downtown Sunol District	Shops, restaurants, offices, B&Bs, taverns and more, all by conditional use permit	Commercial buildings 35 ft; commercial parcels capped at 50% of the district
A Agricultural	Farming, wineries, microbreweries, olive mills with tasting rooms, boarding stables	100-acre minimum parcel for every use
A conditional uses	Outdoor recreation, kennels, animal hospitals, some winery uses and cannabis uses	Board of Zoning Adjustments approval
Large Parcel Agriculture (East County Area Plan)	Tasting rooms, fruit stands, B&B inns, wineries and olive presses	Non-residential FAR 0.01, but at least 20,000 sq ft; 2-acre building envelope
Water Management (SFPUC watershed)	Watershed and limited trail uses	Generally 100-acre minimum; one home per parcel

The Downtown Sunol SD district

Chapter 17.17, adopted by Ordinance 2008-32 and amended in 2010, is Sunol’s only commercial zoning. The 2008 Board of Supervisors report describes the district as about 24.3 acres in 25 parcels. Its rough edges are Highway 84/Niles Canyon Road, the railroad tracks, Bond Street and the Arroyo de la Laguna. The Planning Commission voted 6–0 to recommend it after the Sunol advisory council’s unanimous support.

How it works:

Base uses are residential. By right, the district allows only the uses permitted in the R-1-B-40 single-family district.
Commercial needs a CUP. The conditional list includes retail stores, restaurants, taverns, alcohol outlets, offices, banks, salons, medical clinics, pharmacies, hotels and motels, B&Bs, an events center, indoor recreation, a theater, repair shops and Type A service stations. The Planning Commission decides each one.
The 50% cap. The Commission must find that commercial parcels make up no more than half the parcels in the district. Once that share is reached, no more parcels can convert.
Advisory council review. No conditional use can be approved unless the Sunol advisory council has reviewed it. Site development review applies to any building or construction of 1,000 square feet or more.
Heights and sites. Commercial structures are limited to 35 feet. Building sites need 40,000 square feet and road frontage, unless the lot was created before August 21, 2008. Commercial yards are 10 feet front and rear and 5 feet on the side next to residential land.

For a buyer, this means downtown Sunol commercial value depends on the existing permit. A building with a valid use permit for a restaurant or shop is a scarcer asset than vacant land. New conversions face the cap, a public hearing and community review.

Rural business uses, Measure D and septic

Wineries and tasting. In the A district, wineries, microbreweries and olive oil mills are permitted, with on-site tasting rooms. Visitor space is capped at 30% of the production floor area, and permanent kitchens are not allowed. A farm stand of up to 400 square feet can sell what the property produces. Business signs are limited to 20 square feet in total and cannot be lit.

Measure D. Outside the urban growth boundary, Measure D limits non-residential buildings on Large Parcel Agriculture land to a 0.01 floor area ratio, with a 20,000 square foot minimum allowance and 0.025 for greenhouses. Most buildings must sit within a two-acre envelope. Tasting rooms, fruit stands, B&B inns and agricultural processing are among the visitor and farm uses the area plan allows.

Septic. Sunol has no public sewer system serving most parcels. Zone 7’s Policy 1985-01, adopted August 28, 1985, bars septic tanks for new commercial or industrial development over the groundwater basin and its fringe areas. The exception is a project shown to produce no more wastewater than a rural home. Sunol parcels over the Sunol Valley groundwater subbasin may fall under this policy, so ask Zone 7 and county Environmental Health early. A restaurant or events use with heavy wastewater is the hardest to permit.

Public projects. The SFPUC’s Sunol Long Term Improvements Project covers about 44 acres near Niles Canyon Road and Pleasanton-Sunol Road. It includes corporation yard upgrades and the Alameda Creek Watershed Center near the Sunol Water Temple. Public watershed land shapes what private land is left for business.

Transfer tax, business tax and property tax

Sunol is unincorporated, so there is no city transfer tax. The Alameda County Clerk-Recorder charges only the county’s $0.55 per $500. Businesses need a county license under Chapter 3.04, mostly charged per $1,000 of gross receipts: $0.25 for retail, $1.00 for services and $1.50 for recreation and entertainment. Under Proposition 13, a sale generally resets the assessed value, and Williamson Act contracts on farmland can affect the tax basis, so check for one.

Due diligence that matters in Sunol

Start with our commercial due diligence checklist, then add:

Confirm whether the parcel is in the SD district or in A zoning, and its East County Area Plan designation.
For downtown property, get the existing conditional use permit and confirm it is still valid.
Ask County Planning how many SD parcels are already commercial under the 50% cap.
Get a septic evaluation and talk to Zone 7 about Policy 1985-01 before planning any new commercial use.
For a well-served parcel, test water quantity and quality.
Check fire access and road frontage, which the SD district requires for building sites.

Questions people ask

Is there commercial zoning in Sunol?

Yes, the SD Downtown Sunol District, about 24 acres near Niles Canyon Road. Commercial uses there all need a conditional use permit.

Why can’t every downtown parcel go commercial?

The county must find that commercial parcels stay at or below 50% of the parcels in the district.

Does the Sunol advisory council have a say?

Yes. The Planning Commission cannot approve a downtown conditional use until the council has reviewed it.

Can I open a winery tasting room near Sunol?

On A-zoned land, wineries with tasting rooms are permitted, with visitor space capped at 30% of production floor area and no permanent kitchen.

Can a new restaurant use a septic system?

Possibly not. Zone 7’s 1985 policy bars septic for new commercial development over the groundwater basin unless loading matches a rural home.

Is there a transfer tax in Sunol?

Only the county’s $0.55 per $500.

Does Diamond handle commercial property in Sunol?

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

Sources & notes

Note: The Zone 7 policy does not name Sunol. Whether a parcel is over a covered groundwater area is a question for Zone 7. We did not verify Williamson Act status for any Sunol parcel.

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

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