Commercial Real Estate in King City: Downtown, Highway Service, Industrial Land and Cannabis Zones

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

King City sits on Highway 101 in the southern Salinas Valley, with a retail downtown, highway service sites along Highway 101 and First Street, a set of industrial districts, and a specific plan area by the rail line and Broadway Street that mixes commercial space with housing. The city has also opened its industrial land to licensed cannabis businesses. King City writes its own zoning in Title 17. Confirm the district, any specific plan and the permit history for every parcel with the city before relying on this page.

Who controls the parcel

The City of King City is the land use authority inside city limits; Monterey County controls outside them until LAFCO approves an annexation. Within the city, three kinds of rules may stack on a parcel:

Base districts in Title 17, from neighborhood commercial through three industrial districts.
Specific plans. The Downtown Addition Specific Plan, adopted June 14, 2011 and amended January 28, 2014, covers about 110 acres bounded by the Union Pacific Railroad, Bitterwater Road and San Lorenzo Creek. Its approved figures allow up to 650 homes and about 190,060 square feet of commercial floor area, including live-work space. A 2019 notice began environmental review of further amendments; check what was adopted. The cannabis chapter also names an East Ranch Business Park Specific Plan area.
Combining districts for flood plains (P-F and S-F), the airport (A-P), scenic corridors (S-C) and special building sites (B), plus architectural control under Chapter 17.50.

King City zoning for commercial, industrial and mixed use

District	Intended uses	Notes
C-N Neighborhood Commercial (Ch. 17.20)	Neighborhood-serving shops and services	Confirm standards with the city
C-1 Retail Business (Ch. 17.22)	The community’s retail shopping district: stores, banks, offices, food-only restaurants	2 stories, 30 ft; up to 100% coverage less parking; 2,500 sq ft lots; upstairs housing by permit
C-1-TD Retail Commercial Transition (Ch. 17.23)	Transition between retail and nearby areas	Read the chapter for the transition rules
C-2 General Commercial (Ch. 17.24)	Broader commercial uses	Storefront cannabis retail allowed here
H-S Highway Service (Ch. 17.26)	Vehicle-oriented uses: fuel, fast food, hotels, auto sales, big retail	All uses by CUP; no housing; 50% coverage; hotels up to 4 stories, 50 ft
RI Residential-Industrial Mixed Use (Ch. 17.13)	A mixed district combining homes and light industry	Confirm allowed uses before buying
M-1 Industrial (Ch. 17.30)	Larger-parcel industry: food and beverage manufacturing, warehousing, R&D, farm equipment	1-acre minimum; 60% coverage; 30 ft; 40 ft front setback
M-2 and M-3 (Ch. 17.31, 17.32)	Industrial and heavy industrial	M-3 is the heavy district

Downtown, Highway 101 and the industrial districts

C-1 downtown. Permitted uses must be wholly enclosed. Department and variety stores, drug and grocery stores, banks, bakeries, food-only cafés and professional offices are permitted outright. Bars, restaurants serving alcohol as an incidental use, secondhand stores, laundries, salons, outdoor sales, churches and parking lots need a permit. A two-story building may put housing on the second floor by permit, as long as the residential area does not exceed the commercial area. The Planning Commission must approve site, elevation and landscape plans before a building permit issues, and flashing or animated lighting is not allowed. The chapter dates to Ordinance 354 in 1973, with amendments as recent as Ordinance 808 in 2022.

Highway Service. H-S lists every use, from offices and grocery stores to fast food with drive-throughs, gas stations, vehicle sales, hotels and bars, as requiring a conditional use permit; housing of any kind is prohibited. Convenience stores are capped at 2,500 square feet. The Community Development Director may waive the CUP when a similar use moves into an existing building and adds no more than 25% of floor area or 500 square feet, whichever is less, and is CEQA-exempt. Hotels, restaurants, service stations and vehicle sales need 20,000 square foot sites, and 15% of the site must be landscaped. The chapter was updated by Ordinance 831 in September 2024.

M-1. Every listed industrial use needs a use permit. The district bans asphalt and cement plants, fertilizer, slaughterhouses, explosives and pesticide production. Accessory retail is limited to 10% of floor area, and taller buildings are possible by use permit if sprinklered. Sites need a 20-foot landscaped setback along streets, and lots must be at least 150 feet wide and 290 feet deep.

Cannabis, lodging and other local rules

Commercial cannabis. Chapter 17.03, first adopted by Ordinance 728 in 2016 and amended many times since, most recently in April 2026, permits indoor, mixed-light and nursery cultivation, manufacturing, testing, distribution, microbusinesses and retail. Outdoor cultivation is banned.

Non-storefront retail is limited to M-1, M-2, M-3 and the East Ranch Business Park Specific Plan area.
Storefront dispensaries are allowed only in C-2, the highway service area west of the freeway (excluding Canal Street), and the First Street corridor from Ellis Street to Highway 101, and no more than two storefront permits may exist.
A storefront may not share a property line with residential property, and no cannabis business may share a location with an alcohol use.
Each activity needs its own annual city permit plus a state license. The city also levies a commercial cannabis tax in Chapter 5.14, which we did not review.

Lodging tax. Chapter 3.12 sets the transient occupancy tax at 10% of rent from September 1, 1992, for stays of 30 days or less. Chapter 7.65 adds hotel and motel operating standards.

Flood plains. The P-F and S-F flood plain districts can restrict building in mapped flood areas. Order a flood determination early.

Transfer tax, business tax and property tax

City transfer tax. King City has levied a real property transfer tax since Ordinance 293 in 1967, at 27.5 cents per $500 of consideration over $100, under Chapter 3.08. The county documentary transfer tax under Chapter 5.32 is $0.55 per $500; confirm how they combine on the escrow estimate.

Business license. Licenses fall under Title 5, Chapters 5.12 through 5.24. Ask the city how commercial rental income is treated.

Property tax. A change of ownership generally triggers Proposition 13 reassessment.

Due diligence that matters in King City

Start with our commercial due diligence checklist, then add:

Confirm the base district and whether the parcel is in the Downtown Addition or East Ranch specific plan area.
In H-S, budget time for a conditional use permit unless a waiver applies.
Check flood plain and airport combining districts on the zoning map.
For a cannabis tenant, verify the zone, an open storefront slot, the state license and the Chapter 5.14 tax.
In C-1, confirm Planning Commission approval of any exterior or landscape change.
For industrial sites, check the prohibited-use list and the setback and lot-size minimums.

Questions people ask

Do I need a use permit on a Highway 101 site?

In H-S, yes, for every use, though the director can waive it for a similar use moving into an existing building.

Can I live above my downtown shop?

In C-1, housing is allowed on the second floor of a two-story building by permit, up to the size of the commercial space.

Where are cannabis dispensaries allowed?

Storefronts only in C-2, the highway service area west of the freeway and the First Street corridor, with a cap of two.

What is the Downtown Addition Specific Plan?

A plan adopted in 2011 for about 110 acres bounded by the railroad, Bitterwater Road and San Lorenzo Creek, allowing up to 650 homes and about 190,060 square feet of commercial space.

What is the hotel tax?

10% of rent for stays of 30 days or less.

Does King City have a transfer tax?

Yes, 27.5 cents per $500 under Chapter 3.08.

Does Diamond handle commercial property in King City?

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

Sources & notes

Note: Chapters 17.13, 17.20, 17.23, 17.24, 17.31, 17.32, 5.14 and the combining districts are named from the code index; we did not read them. We did not confirm the outcome of the 2019 specific plan amendments or open the East Ranch plan or the zoning map. Part of the cannabis chapter was not read.

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

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