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The Mountain View Whisman School District is pursuing buying the land on which it has built subsidized housing for its teachers and other staff.
The school board is set to vote on an agreement this week that would give the district the option to buy the 1.8-acre parcel along Shoreline Boulevard where it has constructed 144 employee apartments.
Until now, the district had been planning to rent the land for $1.9 million per year from the real estate developer that is building 572 market-rate apartments next door. Buying the land would eliminate this cost. The district has said that its goal is to set rents so that the project is cost neutral, rather than trying to make money from the endeavor.
For years, Mountain View Whisman has wanted to find ways to offer affordable apartments to its employees in a region where sky-high housing costs can make it difficult for educators to afford to live near where they work.
The school district ultimately entered into an agreement in 2019 with Mountain View Owner, LLC to build apartments for school staff as part of a larger project of otherwise market-rate housing that the developer had planned at 777 West Middlefield Road.
The idea was to construct a separate building with 144 units of affordable employee housing on the site, adjacent to two buildings that would have a combined 572 market-rate units.
Construction of the employee housing building broke ground in 2022 and was finished last year. Out of the 144 units, 123 are reserved for Mountain View Whisman employees. The city of Mountain View has first dibs to another 20 units for its own staff and one unit is set aside for a property manager.
The school district owns the building itself, which it paid for with roughly $88 million from Measure T, a $259 million bond measure that voters approved in 2020. However, the district doesn’t own the land on which the building sits. That’s currently owned by Mountain View Owner, LLC, which was expected to lease the land to the school district.
In recent months, the ground lease has consistently appeared on the school board’s closed session agendas. Because the discussions were happening in private, the details of what was under negotiation weren’t known.
Now, the board plans to take a vote in open session at a Thursday, Jan. 23, meeting to approve an “option to purchase” agreement, which would give the district the chance to buy the land, rather than having to rent it through the ground lease. The option agreement would give the district until June 30 to decide whether to acquire the property, with the purchase price subject to negotiations with MVO in the coming months.
Mountain View Whisman Chief Business Officer Rebecca Westover declined estimate the purchase price, citing the upcoming negotiations. However, she said that having the option agreement in place will be beneficial to the district.
“Having options is always good,” Westover said. “It gives the board the opportunity to explore what it looks like to purchase it.”
According to Westover, when this staff housing project was first being considered, the district asked about the potential to purchase the land, but was told that it wasn’t on the table. That changed when the district inquired again more recently, Westover said.
If the district decides to move ahead with the purchase, there are multiple options the school board could consider for how to pay for it, Westover said. Using existing revenue, Measure T proceeds, a loan or some combination of the three are all possibilities, she confirmed. While Measure T funds are already fully allocated, not all the projects have yet begun.
To enter into the option agreement, the school district will have to pay MVO $100,000, half of which would be refunded if the district opts not to buy the land. If it does buy the land, that money would go toward the purchase price. The other $50,000 is not refundable or applicable to the purchase price.
The $50,000 is non-refundable because the school district is asking for the option to buy the land and MVO will incur fees to go through this process, Westover said.
The deal comes as the district is preparing for its employees to start moving into the building. Mountain View Whisman opened rental applications last year and expects to get the necessary approval for occupancy to begin next month. As of early last week, 23 employees were ready to sign leases and more were in the pipeline, Westover said, adding that was more than expected at this point in the process.
In addition to voting on the option agreement at Thursday’s meeting, the board is also set to vote on formally approving the ground lease. Even though the district is pursuing the option of buying the land, the ground lease will be necessary to occupy the building in the interim, Westover said. The option agreement includes provisions for rent to be deferred during the option period.
Why doesn’t this story about real estate have insight from a real estate expert?
The Palo Alto staff housing that MVWSD is participating in is a good example of how housing can be done with minimal commitment/fiscal burden.
This project is a 144 unit, 88M money pit for a district that doesn’t have the bandwidth or expertise to continue managing it. The attorney & CBO overseeing these negotiations are going to be scrutinized in February’s forensic audit, so perhaps it’s time trustees consult SSCOE or CBSA lawyers for a second opinion.
The city needs to take over this project so the district’s limited funds & focus can go back to student education.
Board mtgs have been focused on this money pit, calls for the CBO to be replaced, & a 15M greening project. Presentations about student performance & MVWSD’s shortfalls compared to neighboring districts are rushed because MVWSD literally has less time to devote to education.
People aren’t moving out of MV or switching to private because of the wonderful teachers & PTAs in our district, it’s because they expect better fiscal & operational performance from the DO. Poor management at the top has had negative consequences below, that even very busy parents are noticing.
Walk away now so the next Superintendent can Focus on Educating.
MV hiker makes no sense. CBO is not under investigation. Voter voted for outdoor improvements. Just like they voted for new HVAC and windows. It was in the bond text. Since clearly uninformed, rest of the arguments are as flimsy as a second graders pinky swear.
As a general rule, Buy land. They stopped making it.
Also in the Bond text – any potential project in the list can be added or subtracted ‘depending’ (Vote of the Board Majority). An “extraordinary audit” of the district finances (the CFO is Chief Financial Officer) by Fiscal Crisis and Management Assistance Team, or FCMAT. FMAT mainly train CFOs etc. (80%) but tasked with “The remaining 20% comes from the state Legislature and other oversight agencies, which task FCMAT with conducting fiscal crisis interventions, including fiscal health risk analyses (FHRAs) and extraordinary audits.” This independent state agency is explained here https://www.fcmat.org/PublicationsReports/FCMAT%20Brochure%207-2023.pdf
BTW – A “funds audit” is not the same as a “fiscal processes audit”. Are Funds where we said they were? Not [are expenses controlled and tracked in a responsible gov. accounting methodology]. A Rudolph misstatement – akin to less than 50 percent of “the truth, the whole truth and nothing but the Truth’. Oct 2, 2024 “With that said, our practices are sound. Each year, an outside independent auditor studies the district’s financial controls and provides a report to the Board of Trustees. For the past 10 years, MVWSD has received clean audits due to exemplary performance and transparency.” [Fund audit only]
Please go read ‘the fund auditor’ disclaimers / not a complete procedure audit / only cursory on that aspect.
“Mountain View Owner, LLC”? Sounds like an April Fools joke. We need a state law to do away with these obfuscatory landlord names.
IVG always throwing out ignorant comments since he’s too lazy to look at the publicly available contract documents that clearly name the people involved.