Commercial Real Estate in Forest Knolls: San Geronimo Valley Zoning, Septic and Creek Limits

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

Forest Knolls is a small unincorporated village in the San Geronimo Valley of central Marin, strung along Sir Francis Drake Boulevard and San Geronimo Creek. Its commercial property amounts to a handful of roadside buildings: a store, a bar or restaurant, small service businesses, and mixed buildings with apartments. The real constraints are septic, the creek and the community plan rather than market depth. Confirm zoning, septic records and creek setbacks for every parcel with Marin County.

Who controls the parcel

Forest Knolls is unincorporated, so Marin County regulates land use under Title 22, the inland development code. It lies outside the Coastal Zone, so no Coastal Development Permit is needed. The San Geronimo Valley Community Plan, adopted by the Board of Supervisors on December 2, 1997, treats Forest Knolls as one of four valley villages with Woodacre, San Geronimo and Lagunitas. Together they cover 1,336 acres. The county’s community plans page lists that plan as the guide for all four. There is no sewer district: the county’s wastewater Q&A says none serves the valley, so properties rely on septic. See our Marin County commercial guide for countywide rules.

Forest Knolls zoning for commercial and mixed use

The community plan (p. IV-2) ties its commercial land use categories to county zoning. Commercial General maps to C-P and H-1, Commercial Residential to VCR, and Commercial Recreational to RCR. The county’s Chapter 22.12 sets what each allows:

District	Intended uses	Notes (Tables 2-6 to 2-8)
VCR Village Commercial/Residential	Village centers balancing resident and visitor services	Retail, offices and restaurants up to 40 patrons permitted. Bars, larger restaurants and hotels by use permit. 35 ft. Housing at 1 unit per 2,000 sq ft. No front setback
CP Planned Commercial	Lower-intensity retail, office and housing	Restaurants, bars and hotels permitted. 30 ft. Setbacks set through design review or master plan
H1 Limited Roadside Business	Rural roadside commercial with limited housing	Most uses by use permit. 30 ft front setback. 35 ft
RCR Resort and Commercial Recreation	Resorts with public recreation access	Hotels, bars and B&Bs permitted. No housing density

In CP, H1 and RCR, dwellings other than affordable housing must be accessory to the primary commercial use. Residential neighborhoods around the village use the plan’s single-family categories, with minimum lots from 10,000 square feet to over 20 acres. Check the zoning map for each parcel.

What drives business use: septic, the creek and coho

Septic. The community plan notes the valley floor’s high winter water table and says a leach field generally needs about an acre. It adds that many small, nonconforming lots may not fit a system at all. The county’s Q&A reports failing systems in the valley, caused by poor soils, high groundwater, small parcels and age, with most systems over 50 years old. Stream monitoring has found high coliform and E. coli levels. The county’s community wastewater work centers on Woodacre and San Geronimo Flats, and Forest Knolls is not part of it. For a restaurant or any use with high wastewater flow, septic capacity is usually the deciding issue.

San Geronimo Creek. The plan places streamside homes along San Geronimo Creek in Forest Knolls. It describes the valley floor as one of the most important coho salmon and steelhead spawning and nursery areas in the Lagunitas Creek watershed, and it calls for a creek preservation zone. Expect county streamside conservation review for work near the creek, including parking lots and additions.

History and open space. The Lagunitas Development Company laid out the Forest Knolls tract in 1914, and its post office opened in 1916. The 192-acre Gary Giacomini Open Space Preserve rises above Forest Knolls and Lagunitas, so the village has no room to expand outward.

Lodging, short-term rentals and other uses

Short-term rentals. Under the county’s Chapter 5.41 (Ordinance 3816, May 2024), Forest Knolls has a cap of 8 licenses, both initially and ultimately. Each owner may hold one license, and multifamily units and newer ADUs are ineligible. Hotels and B&Bs are exempt from the STR license, though they still need zoning approval.
Cannabis. The county licenses only delivery-only medicinal retailers, sited in commercial, office or industrial zones at least 600 feet from schools and youth uses. Walk-in stores are not allowed.
Home occupations. These are permitted in VCR, CP and H1, which suits small offices and studios in mixed buildings.

Transfer tax, business tax and property tax

The Marin County Recorder’s sheet shows the county documentary transfer tax of $0.55 per $500, excluding assumed liens. Forest Knolls has no city, so no city tax applies. Businesses need a county business license, renewed by July 31. Lodging owes county transient occupancy tax. A sale generally triggers Proposition 13 reassessment.

Due diligence that matters in Forest Knolls

Start with our commercial due diligence checklist, then add:

Get the county Environmental Health septic file and an inspection, and check whether the system can handle the intended use.
Confirm the zoning (VCR, CP, H1 or RCR) and whether housing on the site must be accessory to commercial use.
Map San Geronimo Creek and any streamside conservation setback before planning additions or paving.
Check FEMA flood status for creekside parcels along Sir Francis Drake.
Confirm water service with the Marin Municipal Water District and any meter limits.
For rental income, confirm STR licenses, which are capped at eight.

Questions people ask

Who regulates commercial property in Forest Knolls?

Marin County, under Title 22 and the 1997 San Geronimo Valley Community Plan. Forest Knolls is not in the Coastal Zone.

Is Forest Knolls on sewer?

No. The county reports that no sewer district serves the San Geronimo Valley, so properties use septic.

What zoning applies to the commercial strip?

The community plan maps commercial land to C-P, H-1, VCR and RCR zoning. Check the county map for each parcel.

Can I open a restaurant?

In VCR, restaurants up to 40 patrons are permitted and larger ones need a use permit. Septic capacity is usually the practical limit.

How many short-term rental licenses are allowed?

Eight in Forest Knolls under the county’s 2024 ordinance.

Is there a city transfer tax?

No. Only the county’s $0.55 per $500 applies.

Does Diamond handle commercial property in Forest Knolls?

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

Sources & notes

Marin County Code Ch. 22.12, Commercial/Mixed Use Districts and Ch. 5.41, Short Term Rentals (GoCodebook)
San Geronimo Valley Community Plan (adopted Dec. 2, 1997) (copy hosted by the San Geronimo Valley Historical Society)
Marin County, Community and Area Plans
Marin County Environmental Health, San Geronimo and Woodacre wastewater Q&A
Marin County, delivery-only medicinal cannabis
Marin County Recorder, transfer tax and Business License

Note: The community plan copy we read is hosted by a local historical society. Confirm it matches the county’s adopted version. We did not verify parcel zoning, Marin Municipal Water District service rules or exact creek setbacks.

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

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