The Los Altos School District is reviving efforts to acquire land for a new school site near the San Antonio Shopping Center, despite the property owners' unwillingness to sell and their vow to fight any attempts at eminent domain.
At the Dec. 11 school board meeting, the district's "10th Site Committee" recommended buying the sites of the former Safeway and Old Mill office building on California Street across from the San Antonio Shopping Center. Committee members called the 8.6-acre site of valuable real estate the ideal location for a school site.
The recommendations come after a years-long real estate search for the most suitable place to site a new school within the San Antonio Shopping Center area.
But the recommendation, which largely won the favor of the school board and the praise of community members, was clouded by challenges to come. Lawyers representing the property owners of the three parcels that make up the potential school site made abundantly clear at the meeting that they are not willing to sell to the school district, and would likely challenge attempts to take the property using eminent domain. Even if the school district wins, they warned, it won’t be a quick process.
The 10th Site Committee has been searching for a suitable place for a new school since 2012, slowly winnowing down the options in closed-door meetings before presenting four options Monday night. The combined Old Mill Office Center and Safeway site was seen as the best choice, given its close proximity to residential neighborhoods in the area and easy access from San Antonio and Pacchetti Way. It is near a busy thoroughfare -- San Antonio Road -- which could cause traffic and safety problems, but the site makes up for it because of its superior location, according to the committee.
Other options include the CVS Pharmacy and Sprouts parcels to the southwest, the Kohl's and neighboring businesses owned by Federal Realty within the shopping center itself, and the Target along Showers Drive.
Board president Vladimir Ivanovic said he agreed that the Old Mill site was the best option, and that the district ought to drop consideration of the other three options because they would kill commercial activity that benefits the city at a time when the Mountain View City Council is willing to provide the school district with up to $23 million in funding to pay for park land adjacent to a school site.
"They generate significant sales tax revenue for the city of Mountain View, and it would be unseemly for us to accept their money while taking a revenue stream from them," he said.
The recommended land has been on the district's radar for years. In 2015, the school board entered into real estate negotiations with the property owners of the Old Mill site. The effort fell apart, however, when it was clear the property owners were interested in a ground lease only and were unwilling to sell the land. Around the same time, the property owners entered into an agreement with the developer Greystar, which has submitted plans to the city to build 641 homes and 21,400 square feet of commercial space on the property.
Norman Matteoni, representing the property owners, told school board members that they are "destined" to litigation, given the position of the owners. The property owners see their longterm, 95-year lease agreement with Greystar as a reliable source of income for their families for generations to come, he said, and they do not believe the school district can pay them as much as the private market could.
If the district decides to move forward with eminent domain in order to take the property, he said it will face a lengthy process, and that the owners intend to resist that process.
"You as a public agency have a right to invoke eminent domain, and the property owners have their defense. It's not an easy road," he said.
Ivanovic said he was hopeful for resolution, but that the property owners' decision on whether to fight the district is entirely their choice and did not weigh on the decision to select the site.
"Litigation is entirely within your (property) owners' hands, and if you start it that's fine," he said. "I'm hopeful that we can talk to your owners and achieve some sort of agreement here."
Mountain View City Council member Lenny Siegel said he did not oppose the district's use of eminent domain, and that he supports the move if it's necessary to build a school north of El Camino Real. His sympathies did not lie with the property owners, who have been unequivocally against selling the land to the school district, and would be forcing the district's hand.
"I'm not really comfortable with property owners who stand in the way of schools being built that are needed," he said.
During the Oct. 2 City Council meeting, a lawyer representing the Kalcic and Marazzo families that own the three parcels comprising the Old Mill, Safeway and adjacent office building along San Antonio Road warned council members that eminent domain would be a costly endeavor, and that the school district would be on the hook for Greystar's work on its mixed-use development that would be scrapped if the district acquires the land.
The lawyer, Barton Hechtman, told council members at the meeting that the property is "uniquely valuable" with a total valuation that will exceed $400 million, and that it would be far more cost effective for the school district to pursue other sites in the area.
Siegel said it's been clear from the outset that the property was an ideal location for a school, and should be a surprise to no one that Los Altos School District announced its intent to purchase the property Monday night. It also means that Greystar and the property owners knew full well that it was spending money to plan for a project with an ambiguous future.
"We have made clear since the Greystar development was a twinkle in their eye that it's a potential site for a school," Siegel said.
Deal would increase office development
The school district plans to pay for the land purchase, which could end up costing between $10 million and $15 million per acre, through the transfer of development rights (TDRs). Using a complex maneuver that still has to win approval from the Mountain View City Council, the Los Altos School District can build a school at a density significantly below what is zoned for the area, and "sell" the remaining density to property owners for use elsewhere in the city. The district is planning to sell 610,000 square feet of development rights at an anticipated price of $130 per square foot, for a total of $79.3 million.
Under the agreements, which the school board unanimously approved at the Dec. 11 meeting, the district is planning to sell building rights to several companies, ratcheting up the intensity of office development, mostly in the East Whisman and North Bayshore areas. The largest single buyer is Merlone Geier, which agreed to buy 150,000 square feet of development rights to expand its presence within San Antonio Shopping Center.
The next largest buyer is the property owner of the office park along the 300 block of East Evelyn Avenue, which is currently home to several companies including Mozilla, Coursera and Concentric Medical. The buyer, who signed off on the agreement under the name "MV Campus Owner, LLC" intends to buy 125,000 square feet from the district at a cost of $16.2 million.
The only outlier is Google, which is willing to buy density rights but has yet to agree to a sale that is "acceptable to the district," according to a staff report. The district sees Google's role as a flexible "back-up purchaser" of development rights that could pick up whatever density is left over after sale agreements with other property owners. All of the density ultimately sold to Google would be tacked onto the company's large-scale campus expansion in North Bayshore.
"Google's ultimate purchase and use of TDRs could be zero, or range higher than the placeholder amount (72,000 square feet)," according to the staff report.
Siegel said the office growth resulting from the TDRs is a bitter pill to swallow and that he doesn't want to see a lot of new offices built on top what the city has already approved, but he said it's a worthy trade-off for a desperately needed school north of El Camino Real.
The school board also voted 5-0 to approve the individual agreements with developers to buy the density rights, through documents called Letters of Intent. The district will have to revisit the deal with Google and approve it at a later date, district staff said.
After the meeting, the district released a statement noting that the TDRs will go a long way toward lowering the cost of buying land for a new school, leaving money available for upgrades to existing school sites from the $150 million Measure N bond. It also means Los Altos School District residents living in Mountain View would finally have a school north of El Camino Real, and park space in a part of town where green space is hard to come by.
"We are excited to fulfill the promise we made to voters when they passed Measure N," Ivanovic said in the statement. "This is a win-win for our community. We are able to address projected, long-term enrollment growth with the 10th school our parents and community have asked for, while saving millions in the process."
Charter or neighborhood school?
One critical question that remains unanswered, and has been a sticking point for some Mountain View council members, is whether the school site north of El Camino Real will be the home of Bullis Charter School or a new neighborhood school specifically for Mountain View families.
When the City Council largely supported the idea of allowing TDRs in the San Antonio Shopping Center area in October -- kicking off the cascade of events that would make a Mountain View school a feasible option -- a majority of council members were unwilling to specify what kind of school it ought to be.
Council member John McAlister said it wasn't the city's business to wade into the debate on whether the land ought to be used to house Bullis or a neighborhood school, regardless of the city’s efforts to sweeten the real estate deal. On the other side, two council members, Margaret Abe-Koga and Pat Showalter, showed interest in requiring the school district to make the new school a neighborhood school.
The size of the parcel doesn't tilt the situation toward either option. At a combined 8.6 acres, the Old Mill and Safeway parcels could feasibly fit either an elementary school or Bullis Charter School, which has over 800 students, leaving it an open question what the school board will decide to do with the land.