|
Getting your Trinity Audio player ready...
|
In many ways, Shenandoah Square is a perfect site to help satisfy Mountain View’s hunger for housing — nearly ten times as many homes could be squeezed in if the property was fully built out. But a U.S. Army-backed proposal to sell and redevelop the site has provoked a blistering opposition campaign, with Sens. Dianne Feinstein and Barbara Boxer, along with nine Bay Area U.S. Representatives, coming out against the idea.
To call the circumstances surrounding Shenandoah complicated is putting it mildly. The 17-acre site represents a bubble of federal land at the corner of Moffett Boulevard and Middlefield Road flanked by the city of Mountain View on all sides. Under a gatekeeper project submitted to the city last year, a partnership between the U.S. Army and a private firm proposed ceding that land to the city of Mountain View so it could be sold to private developers and someday accommodate 1,000 apartments.
That idea hit a wall of opposition last week as city officials began studying whether to pursue a precise plan for the Shenandoah site. About a dozen California members of Congress signed a letter outlining concerns over the prospective sale. In a separate letter, Rep. Anna Eshoo took the criticism further, blasting the plan as a ploy to reap a handsome sum from the sale to pay off a $460 million debt accrued from a “misguided” and “unprofitable” housing project at Fort Irwin in San Bernardino County. She asked the city to hold off in order to help retain Shenandoah as federal property.
“I urge you to suspend the city of Mountain View’s cooperation with the (U.S. Army) on the entitlements needed to redevelop and ultimately sell the land until a new public-private partnership is shaped by the Army to keep the land under federal jurisdiction (and) can be considered,” she wrote.
At the heart of the opposition to Shenandoah’s sale is the uncertainty it would cause for more than 100 current residents. The site’s 126 apartments were built nearly 30 years ago to provide affordable housing for Moffett Field service members and their families. Lacking enough enlisted residents, the housing complex later expanded its eligibility requirements, first to allow federal civilian employees such as NASA Ames workers, and more recently allowing some ordinary tenants with no government affiliation to live there.
At the City Council’s Nov. 29 meeting, Shenandoah tenants described the military’s sale plans as being tantamount to a mass displacement for its more than 100 households. Federal families complained their pay was based on salaries set by Washington, D.C., and they wouldn’t be able afford housing in the Bay Area if Shenandoah was sold. Following a $500 rent increase in June, Shenandoah tenants say they are currently paying $2,800 a month for a two-bedroom apartment.
“One group that tends to get overlooked in these discussions are the federal civilians whose income isn’t tied to the locality of Silicon Valley,” said Matthew Buffington, a NASA Ames employee. “(Shenandoah) is one of the few available options when you want to live in Mountain View on a federal salary.”
Mountain View City Council members found themselves thrust in the center of this dilemma at last week’s study session. Their meeting was organized to consider a precise plan for Shenandoah, which city staff recommended as the first step in a lengthy process to annex and redevelop the site. But most of the discussion that night was spent trying to figure out the nuts and bolts of the federal squabble playing out before them.
The military’s ownership company — dubbed the California Military Communities (CMC) — was represented by Frank Coen from Clark Realty Capital and Scott Chamberlain of the U.S. Army. Through a public-private partnership, Clark and the Army jointly own California Military Communities and its portfolio of housing projects near Moffett Field, Fort Irwin and Camp Parks in Dublin.
Speaking to the Voice, Chamberlain said the firm’s $460 million debt from San Bernardino County cited by Eshoo was accurate, but he said it was a result of a wide-ranging series of housing investments, including construction of 114 homes at Camp Park, the 181-home Wescoat Village at Moffett Field and about 900 houses at Fort Irwin.
“The debt is significant, but you have to understand that it’s debt from building all this housing,” he said. “Money from (selling) Shenandoah will go into the project account which will maintain the homes at Park, Moffett and Irwin.”
The high value of the Shenandoah site has basically been subsidizing CMC’s other less-profitable housing ventures, according to Eshoo’s office. After building hundreds of homes at Fort Irwin, CMC officials reportedly learned the Department of Defense allotted the base a smaller housing allowance than they anticipated, resulting in a $1 million to $2 million annual loss.
An aide from Eshoo’s office observed the meeting, but said he wasn’t authorized to speak on the issues.
Mountain View council members admitted many of the issues surrounding Shenandoah were simply beyond their scope as the local government. Should the city hold off on even studying the U.S. Army’s proposal due to Eshoo’s concerns, asked Councilman Mike Kasperzak.
“I feel like (Eshoo) is throwing us to the Beltway, asking us to do something beyond our power or authority,” he said. “It’s not our decision; it’s out of our hands.”
The number of federal employees working near Mountain View is set to steadily increase. The U.S. Geological Survey announced plans to relocate its West Coast science center to Moffett Field, which will eventually add hundreds more federal employees to the Mountain View area. A relatively new Silicon Valley initiative by the Pentagon, the Defense Innovation Unit Experimental, is also expected to grow in the coming years.
Given those projections, several council members agreed it seemed reckless to throw federal workers into an unfriendly housing market. Mayor Pat Showalter recalled her time working as a federal scientist about 30 years ago. The pay was insufficient even then, she said.
“The pay is simply not commensurate with living here,” she said. “Long-term, we need to supply the needs for our military and scientific workers at Moffett Field.”
CMC officials emphasized that many details surrounding Shenandoah were still up in the air. In January, they expect to put out a request for proposals to sell or perhaps sublease the property for a future development. Any new housing project could still give priority to federal employees, Cohn said. But they urged the Mountain View council not to wait until every issue is resolved before the city begins the planning process, which is expected to take two to three years.
“This site is approaching 30 years in age. At some point, if we don’t sell the property, we’ll close the property,” Chamberlain warned. “We won’t put project money into it; we’ll simply close the property, and most likely demolish it.”
The council agreed to move forward on the precise plan in a 5-2 straw vote with Mayor Pat Showalter and John McAlister opposed. Running through a series of staff questions about designing a precise plan, most council members strongly urged the CMC to find some way to lease rather than sell the Shenandoah property.
In general, council members gave direction for a phased project with ample parks and transit connectivity that would provide equivalent affordable housing for federal employees.
Taking up a proposal by Councilman Lenny Siegel, the council asked staff to look into forming some kind of community land trust at Shenandoah that could lease the federal land.
Protesters show up for back-to-back anti-ICE protests in Mountain View, Palo AltoJanuary 24, 2026 3:50 pm
I really like how the current buildings look. Too bad the army thinks that 30 years is “end of life” and that the they need to be demolished. I would much rather see the current structures remodeled and updated. The council thought that 7-story apartments (5 stories of wood on top of 2 stories of concrete, similar to Carmel Village at San Antonio) would be okay! Why is the city council turning our city into a place which is less and less desirable to live in? How is all this building helping the current residents of Mountain View?
Traffic in that area is already well and truly screwed. Now they want to add 1000 units. Is anyone thinking with a brain?
As usual, the council is only thinking how they can line their pockets. There are already more and more rental units going on the market and they haven’t even finished building all the mega complexes they’ve approved. I’ve never seen city government who hates their city so much they are doing their best to destroy it as fast as possible. They’re not even shy about it having the developers come over and give them gifts yearly like a corrupt nativity scene. Stop building.
NO MORE RENTAL UNITS! We need a community with a sense of OWNERSHIP. If this land is sold, it should be mandated for actual homes or condos owned by residents, NOT built for the sole benefit of yet another corporate landlord.
@ Alex M of Willowgate. Soon to be installed Councilwoman Lisa Matichak has been strongly in favor of new housing that is RESIDENT OWNED. This is one reason that I was a strong supporter of her in the recent election. There are many reasons why this is desirable (in MV, we are the 2nd largest precent-renter-city in the Bay Area).
For city (and school district) tax support – residential ownership changes hand and gets reassessed, at current market rate – much more often that large cooperate ownership rental properties.
Our Congresswoman is badly out-of-touch with the housing problems of this district. Constituents? Inform her through constituent snail-mail to her local office. Hon. Representative Anna Eshoo, 698 Emerson Street, Palo Alto, CA 94301
The simple solution to the displacement concerns (and @Albert’s concern, to some extent) is to phase the project. Developing the vacant lot on the corner as phase 1 is straightforward. Then, if phase 2 is deemed necessary, the military tenants can be housed in phase 1 while the older area is rebuilt.
@Jes:
“Traffic in that area is already well and truly screwed.”
This is on Moffett Blvd, where commute traffic is blissfully light.
@Alex M:
“If this land is sold, it should be mandated for actual homes or condos owned by residents…”
That doesn’t really work. If you build more “ownership units” than the market will support, the owners will just rent them out.
Again, cities follow a path of development. If they are successful they go high density. To allow present tenants to dictate the future is bad. If you want high rates of private ownership go to less successful areas. Silicon Valley is the new Manhattan. Celebrate, there will be greater wealth for those who can afford the higher rental rates. Remember there is no such thing as “affordable housing”, just subsidized housing.
George Drysdale a social studies teacher
Thank you for explaining the history of this unincorporated exclave. I always wondered why there was a hole in the middle of Mountain View.
Contrary to what ivg says, the Shenandoah property actually fronts partially on Middlefield and partially on Moffett. The main access driveway is likely to be on Middlefield. It is a half block from one of the most miserable intersections in MV, the intersection of Shoreline and Middlefield. A new 700-unit development has been approved right across the street, at 777 W. Middlefield, and I don’t think that was a smart decision. The Council (or the Army) should have some caution in developing Shenandaoh. There isn’t adequate road capacity for more high density at this location.
If it’s going to be developed, at least part of this property should be ownership units. I like Lenny Siegel’s idea of a “Community Land Trust” that could provide ownership units at a reduced price, in return for the owner giving up part of the increase in value when the unit is later sold. The “market” will absolutely support ownership units – right now home sales are down because of a lack of inventory, not because people necessarily prefer to rent.
Build,Build,Build tell the cows come home!!
I live at Shenandoah Square. I invite the reader to drive by and take a look at the property. It is at the intersection of W. Middlefield Rd. and Moffett Blvd.
You will see what looks – at first glance – like a park north of the intersection. Look closer, and you will see side streets and parking areas — but no buildings. Here is wide open ground that was never developed, in the midst of a housing shortage! What’s wrong with this picture?
Perhaps CMC should consider building apartments on the property that was obviously part on the original plan, instead of threatening to tear down housing that is currently occupied.
[I am surprised that “Housing” is not an available category for comments to the Town Square!]
It seems to me the crux of this issue is inadequate compensation for federal employees living in the Bay Area. By preventing the development of housing for all their constituents, the elected representatives seem to favor a few. Please, Members of Congress and Senators, fix the compensation problem and let Mountain View get on with building more housing for all.
So let me get this straight: On the one hand, we implement rent control provisions because supply/demand imbalance has caused skyrocketing rents, then on the other hand our genius elected officials oppose a plan that would add significant supply to the market and partially offset some of that imbalance? The site is close to many major Mountain View employers and is perfect to reduce commute times and “carbon footprint” for many tenants. I’m indifferent to whether these would be rentals, or owner occupied condos, but the notion that this should be stalled because of ~100 renters currently on the site is ridiculous. There are ways to mitigate the impact on current tenants without stalling or killing the whole deal.
I am concerned with the follwowing information:
That idea hit a wall of opposition last week as city officials began studying whether to pursue a precise plan for the Shenandoah site. About a dozen California members of Congress signed a letter outlining concerns over the prospective sale. In a separate letter, Rep. Anna Eshoo took the criticism further, blasting the plan as a ploy to reap a handsome sum from the sale to pay off a $460 million debt accrued from a “misguided” and “unprofitable” housing project at Fort Irwin in San Bernardino County. She asked the city to hold off in order to help retain Shenandoah as federal property.
It looks like this business cannot actually develop property correctly. They have a half a billion dollar debt.
I would not do any business with such an outfit. I would seek out an alternative. If that is not possible. Then no business is better than bad business.
When the developer proposal is made by a smart and not in debt firm, I would consider it.
I am very confused, the news article stated:
The high value of the Shenandoah site has basically been subsidizing CMC’s other less-profitable housing ventures, according to Eshoo’s office. After building hundreds of homes at Fort Irwin, CMC officials reportedly learned the Department of Defense allotted the base a smaller housing allowance than they anticipated, resulting in a $1 million to $2 million annual loss.
But that site is not developed at all yet. The only value of the Shenandoah site has is “speculative” at best. And if you follow the Graham V Bank of America case law, that states:
“Statements regarding the appraised value of the property are not actionable fraudulent misrepresentations. Representations of opinion, particularly involving matters of value, are ordinarily not actionable representations of fact. (Neu–Visions Sports Inc. v. Soren/McAdam/Bartells (2000) 86 Cal.App.4th 303, 308 (Neu–Visions ) [accountant’s opinion of the value of a building not actionable misrepresentation of fact]; Padgett v. Phariss (1997) 54 Cal.App.4th 1270, 1284 [opinion of fair market value of property not actionable misrepresentation].) A representation is an opinion “ ‘if it expresses only (a) the belief of the maker, without certainty, as to the existence of a fact; or (b) his judgment as to quality, value ․ or other matters of judgment.’ “ (5 Witkin, Summary of Cal. Law (10th ed. 2005) Torts, § 774, p. 1123.)
Appraisals are “an opinion as to the market value” of a property prepared by a qualified independent appraiser. (12 C.F.R. §§ 34.42(a), 34.45 (2014); 12 Witkin, Summary of Cal. Law (10th ed. 2005) Real Property, § 498, p. 576.) It is an estimate of the price a buyer would be willing to pay and a seller would be willing to accept at a given time based upon market conditions.
An appraisal is performed in the usual course and scope of the loan process to protect the lender’s interest to determine if the property provides adequate security for the loan. Since the appraisal is a value opinion performed for the benefit of the lender, there is no representation of fact upon which a buyer may reasonably rely. “While it [is] foreseeable the appraisal might be considered by plaintiff in completing the loan transaction, the foreseeabilty of harm [is] remote.
Plaintiff [is] in as good a position as ․ defendant to know the value and condition of the property. One who seeks financing to purchase real property has many means available to assess the property’s value and condition, including comparable sales, advice from a realtor, independent appraisal, contractors’ inspections, personal observation and opinion and the like․
Stated another way, the borrower should be expected to know that the appraisal is intended for the lender’s benefit to assist it in determining whether to make the loan, and not for the purpose of ensuring that the borrower has made a good bargain, i.e., not to insure the success of the investment.” (Nymark v. Heart Fed. Savings & Loan Assn. (1991) 231 Cal.App.3d 1089, 1099.)”
So the court states that in fact there is no such thing as a fair market value because it is not scientifically determined at all. It is a negotiated concept that is speculative at best, and cannot be relied upon by any party considering a land investment. So if the California Military Communities (CMC) has used accounting trickery to offset the enormous half a billion dollar debt, by claiming it has another property not developed claiming it is worth $1 Billion, this is a fraudulent practice. You cannot monetize the undeveloped property at all, and the practice in doing so is the same as mark to market values used in the Enron debacle.
A reminder of what Enron did:
“THE ROLE OF MARK-TO-MARKET ACCOUNTING
Enron incorporated “mark-to-market accounting” for the energy trading business in the mid-1990s and used it on an unprecedented scale for its trading transactions. Under mark-to-market rules, whenever companies have outstanding energy-related or other derivative contracts (either assets or liabilities) on their balance sheets at the end of a particular quarter, they must adjust them to fair market value, booking unrealized gains or losses to the income statement of the period. A difficulty with application of these rules in accounting for long-term futures contracts in commodities such as gas is that there are often no quoted prices upon which to base valuations. Companies having these types of derivative instruments are free to develop and use discretionary valuation models based on their own assumptions and methods.
The Financial Accounting Standards Board’s (FASB) emerging issues task force has debated the subject of how to value and disclose energy-related contracts for several years. It has been able to conclude only that a one-size-fits-all approach will not work and that to require companies to disclose all of the assumptions and estimates underlying earnings would produce disclosures that were so voluminous they would be of little value. For a company such as Enron, under continuous pressure to beat earnings estimates, it is possible that valuation estimates might have considerably overstated earnings. Furthermore, unrealized trading gains accounted for slightly more than half of the company’s $1.41 billion reported pretax profit for 2000 and about one-third of its reported pretax profit for 1999.
– See more at: http://www.journalofaccountancy.com/issues/2002/apr/theriseandfallofenron.html#sthash.XDwmcibk.dpuf”
This is the problem with the nature of apartment development in California right now. Everyone is making baseless claims of value that are simply unrealistic. And this is over inflating the balloon or bubble and it is bursting.
And as a result a lot of investors are expecting to make profits on property investments that are not as valuable as they are told. And at the same time the same investors are passing the cost onto the persons who are renting or buying the properties that are developed. This has been a standard operating business practice for more than 2 decades in California. But it is falling apart.
It is a variation of the pyramid scheme, where the last buyer or investor pays the cost of the investment and profit to the last seller, which was the second to last buyer who paid the cost and profit to the second to last seller and so on.
It eventually implodes on itself.
Looks like someone is on Santa’s Naughty list.