It's a sign of the times. What was once a flourishing industrial area is being bulldozed for new housing developments. The nearby light rail line makes the area an urban planner's dream: A mixed-use district with easy access to public transportation. But the transition from commercial hub to bedroom community isn't easy, and the future Danbury Place is just one player in the game of how to revitalize an economically depressed area.

The property, located at 1141 N. Fairoaks Ave., used to host three separate buildings that housed print advertising and chemical exporting companies. But now, the buildings have been demolished to make way for 168 new condominiums being built by Pulte Houses of Bloomfield Hills, Mich.

Another construction site on Morse Avenue promises even more housing units.

Having such developments in the midst of an area dedicated to business seems odd until one sees the bright pink townhomes across Tasman Drive and the Kensington Place Apartments farther down N. Fairoaks. Both were among the first developments that went up in this area after it was given an "industrial to residential" zoning designation by the city of Sunnyvale in 1993.

According to Diana O'Dell, associate planner with the city of Sunnyvale, the property at 1141 N. Fairoaks Ave. and surrounding land had always been designated an MS (industry and services) district since its initial development in the late 1970s/early 1980s. The city decided to overlay a medium-density residential district in 1993 to offset the influx of jobs at nearby Moffett Field. "Our plans call for balancing jobs and housing development, so in keeping with our long-term plan, we implemented the ITR overlay as a long-term transition," O'Dell said.

The hot housing market at the time made the choice seem like the perfect solution for hungry housing developers, but many haven't taken the opportunity until now. "We haven't seen much action until the last year and a half," O'Dell said. "Suddenly, everyone wants to build in these ITR districts."

Sunnyvale has a number of projects in progress on other ITR sites, including townhomes going up on the old Cupertino Electric property on E. Evelyn Avenue. However, the area near the intersection of N. Fairoaks and Tasman Drive is undergoing a more pronounced economic depression.

Joe Dellamano is the plant manager at Patson's Media Group, a publishing company located at the corner of Tasman Drive and Karlstad Drive and surrounded by the current construction. Dellamano said Pulte Houses made the company an offer for its land, but the offer didn't cover the cost of a new building and moving heavy printing equipment, so the company is staying at the same spot it has for just over a decade.

Patson's has witnessed the area's ebbs and flows.

"The business in this area is off quite a bit. A lot of people have moved out," Dellamano said. "Our own business is off 40 to 50 percent from what it was a few years ago."

When investigating commercial properties for the company's possible move, a Realtor told Dellamano that more than 55 million square feet of office space was empty between San Bruno and San Jose. But with another commercial property at 1161 N. Fairoaks scheduled for demolition within the next year and Patson's Media Group getting further pressure to sell, he suspects empty office space in the Tasman/N. Fairoaks area may fall to more housing.

While Dellamano said the contractors have been very considerate of Patson's needs, he's concerned about the influx of homeowners in a commercial district. Employees work at Patson's Media Group until 1 a.m., and some take breaks to play soccer in a back parking lot that will soon abut new housing. Skateboarders often come onto the company property, and Dellamano has seen vandalism of his employees' cars, such as siphoning of gas tanks, skyrocket since residents began moving into the area. "There'll be an eight- to 10-foot wall around us, but there are going to be issues," he said. "People will need to know that they're moving into a commercial area."

The mix of businesses and housing is ideal from a planning standpoint, especially considering the light rail line that comes through the area, but residents will have to cope with another consequence of a mostly business oriented area: the lack of services. The closest full-service grocery store is Albertson's on N. Mathilda Avenue, more than two miles away by car.

"There are some parks and some services, but this can be a real stickler for those residents down there," said David Simons, a member of the Sunnyvale Planning Commission. "The amount of people being drawn to the area doesn't support that kind of business yet." He mentioned that the area's location between two freeways restricts access for trucks delivering goods to stores. And with the building of mega grocery stores these days, the lack of available space discourages chains from coming into the area.

The presence of the Mountain View-Milpitas light rail line should help that problem. "There is a lot of business along light rail, but it was placed in an area that doesn't go right down El Camino," Simons said. But with no light rail access and only two bus lines connecting this part of N. Fairoaks to central Sunnyvale, the places where people travel on public transportation may not benefit their own community. "The decision was made many years ago for light rail to go to Mountain View," Simons said. "Developing these various kinds of housing is part of a regional goal even if it doesn't get the residents to downtown Sunnyvale."

Simons hopes that this cocktail of deflated businesses and a warming housing market will help absorb the extra office space and create communities where all occupants work to solve problems right away. For now, the situation is much like the future site of Danbury Place: A work in progress.