News

Council rejects tweaks to North Bayshore housing project

Despite complaints of onerous fees, Sobrato's Pear Avenue project revision is voted down

If a 635-unit housing project on Pear Avenue is a trial balloon for new housing in North Bayshore, it could be in for a rough ride.

On Tuesday night, the City Council denied a request to heavily tweak the housing project, overruling concerns by the Sobrato Organization that rising city fees were making the homes too expensive to build. The decision puts more pressure on Mountain View leaders to balance the market forces needed to build 9,850 new homes with the fees needed to fund schools and parks.

First proposed in 2015, Sobrato's Pear Avenue project was well ahead of the curve for housing projects in North Bayshore. The proposal, which was submitted through the city's gatekeeper process, calls for 635 apartments and a new 231,000-square-foot office building intended to be leased by Google. As a carrot, Sobrato officials pledged to donate a 1.4-acre parcel that could fit up to 140 affordable homes.

After three years of planning, the Pear Avenue project was scheduled to be presented to the city earlier this summer, but Sobrato officials pulled it back. Tim Steele, Sobrato vice president, pointed out the city's total fees had ballooned to more than $38 million, or about $60,000 per home. The project no longer penciled out, he said.

City housing staff echoed similar warnings. Given the costs, housing services manager Wayne Chen estimated that housing developers would need to charge an additional $950 in monthly rent per apartment in order to recoup their expenses.

On Tuesday night, Sobrato officials presented a pair of alternatives to make the project feasible. Both proposals called for Sobrato reducing its housing commitment to about 400 apartments, but the company would donate land for a park and sell the city about 2.5 acres for an affordable housing project. Steele described it as a "win-win" solution that would trade some affordable housing for more parkland.

Councilman John McAlister wanted to go for it, describing it as a great opportunity to get more parks and affordable housing. He applauded the "out of the box" thinking that went into the alternatives.

"With the cost of property and all the requirements, being creative is what we need to get to housing solutions," he said.

Yet the pitch landed with a thud for other council members, who expressed reluctance to rejigger the plans at this late stage. City staff acknowledged that the alternatives would require some tricky legal agreements and construction phasing. Plus, the city would inherit a significant portion of the school fees that Sobrato would otherwise be obligated to pay.

For those reasons, Councilman Chris Clark said he wouldn't support the plan.

"I appreciate the alternatives, but the original gives us the maximum number of affordable units and maximum flexibility," said Clark. "My worry with the (alternatives) is I don't know how far down the rabbit hole we have to go to make it work."

In a 4-3 vote, Clark and council members Ken Rosenberg, Margaret Abe-Koga and Lisa Matichak voted to reject the alternatives. Clark acknowledged the city would probably need to scale back its fees.

At a Sept. 4 meeting, the council heard from several developers that due to skyrocketing land values, city fees for parks and schools have been rising precipitously, making it infeasible to build housing in North Bayshore. City staff say those fees are adding about $120,000 in costs for each apartment built. Local school districts have said that transforming North Bayshore from an office park into a residential neighborhood will create the need for new schools to be built, something the districts can't afford to do without significant help.

Modifying the city's fees will be discussed at a future City Council meeting.

Comments

6 people like this
Posted by Nora S.
a resident of Rex Manor
on Sep 13, 2018 at 1:39 pm

Hi Mark,

Thanks for this article. How are city fees calculated? Are they a percentage of the unit value, or are they a set amount per unit?


7 people like this
Posted by Bored M
a resident of Cuesta Park
on Sep 13, 2018 at 3:37 pm

Why is anyone trying to build residential housing in North Bayshore anyways? We have areas where we could increase density without burdening an entire new area. The areas between Shoreline and San Antonio Road would be ideal for five story apartments and they would have commercial areas within walking distance.

If it needs to be done, I hope the city council has the fortitude to ensure proper funding for schools. Don’t build at any cost and certainly do not stick the costs to anyone but the developers themselves.


9 people like this
Posted by Kathy S
a resident of Old Mountain View
on Sep 13, 2018 at 4:11 pm

Kathy S is a registered user.

Nora, the way school fees are calculated is that first the school district has to establish the cost of accommodating the new students projected to come from the new housing. Then this cost is allocated among the new homes on a cost per square foot basis. There is a statutory cap on this amount. So the school fees for each housing unit are the projected cost per square foot (up to the statutory maximum) multiplied by the number of square feet for that unit.


4 people like this
Posted by Joseph
a resident of Whisman Station
on Sep 13, 2018 at 6:59 pm

Kathy, thanks for the explanation. But if school fees are only based on the cost of educating students and not on property value, why would the fees increase over time? My naive assumption is that the cost of educating a student stays constant except for inflation. Is that completely wrong?


1 person likes this
Posted by Kathy S
a resident of Old Mountain View
on Sep 13, 2018 at 7:20 pm

Joseph, I’m not sure I understand your question. I thought Nora was asking about developer fees, which are paid to the school district one time. What are you asking about?


Like this comment
Posted by Kathy S
a resident of Old Mountain View
on Sep 13, 2018 at 7:23 pm

And now that I reread Nora’s comment, I don’t even think I answered her question. She asked about city fees.


5 people like this
Posted by side1
a resident of Rex Manor
on Sep 13, 2018 at 8:09 pm

I saw a comment from "Cuesta" area suggesting between Shoreline and San Antonio for 5 story buildings... Why not build a few 5 story buildings south of ECR near Cuesta Park right along the community shuttle route? Larger lots, take out 6 houses and put in 60 condos.


6 people like this
Posted by Bored M
a resident of Cuesta Park
on Sep 13, 2018 at 9:14 pm

@side1, this isn’t about picking on an area without reason or a scenario where I don’t want apartments in Cuesta. Anyone that drives down Grant Road during the day might disagree though.

The area between Shoreline and San Antonio, boxed in the sides by Central and El Camino already hold a great number of apartments. I’m not hardened to these boundaries, but by replacing 2-3 story structures with 5 story structures, we’d double density and have already made commercial areas in walking distance for all tenants. We wouldn’t need to create a new neighborhood and encourage the senseless sprawl which would worsen traffic everywhere. And if the demand exists, run a VTA line straight from Google to the center of this dense area. Besides, I’m sure our local businesses would appreciate more nearby demand.


2 people like this
Posted by Resident
a resident of Stierlin Estates
on Sep 13, 2018 at 9:52 pm

I agree with side1, plus we should also plan to redevelop old Mtn View. It’s next to downtown, near Caltrain. Plus Moffet/Castro will no longer connect go through. Bored M has seen no real traffic, try Middlefield and Shoreline every day. Specially when there are accidents on 101 and every traffic report sends cars to use Middlefield. Plus don’t start me on concert nights. And all that is in addition to the normal commute traffic and Google’s new headquarter isn’t even finished.


3 people like this
Posted by Mixup
a resident of another community
on Sep 13, 2018 at 10:29 pm

The city does NOT charge school fees. The various school districts charge impact fees that are capped by state law. I believe this is currently about $3.50 per square foot. So for a 1000 ft apartment, it would only be $3500, which is much less than what is mentioned in the article. So best I can figure, the city is charging a lot for park land per unit. I thought this was offset by a land donation for park use. It seems like the the city building 200 affordable apartments would not "inherit" much of a fee to the school district just $700,000. But the city would also inherit its own fees for parkland for such a development. This might make sense since there is a lot of parkland in the general area. There's the regional park and there is the Charleston Park. The Charleston park is really lightly used.


4 people like this
Posted by Nora S.
a resident of Rex Manor
on Sep 14, 2018 at 10:20 am

Kathy, thanks for your explanation! But I think part of the confusion is because this article conflates developer fees from the city and those from the schools. It would be nice to hear from the journalist about that. (Mark Noack, are you listening?) The article says:

"due to skyrocketing land values, city fees for parks and schools have been rising precipitously"

And that makes me wonder how they are calculated. Perhaps when the school district is figuring out the cost of accommodating new students they take into account the cost of land for a new school?


3 people like this
Posted by Kathy S
a resident of Old Mountain View
on Sep 14, 2018 at 10:51 am

Nora, if a school district needs to buy land, that would be included in the cost of accommodating new students. But that cost is highly likely to exceed the statutory cap, so is usually irrelevant to school fees.


7 people like this
Posted by California Ave
a resident of Another Mountain View Neighborhood
on Sep 14, 2018 at 11:02 am

A bit of additional information in response to Nora's question: Mixup and Kathy S. are correct that school fees are imposed by the school districts based on habitable square footage, and that the State sets a cap on the amount that districts can charge (currently $3.79 per square foot for Level 1 fees). However, the City of Mountain View is proposing to require developers to pay an additional fee to the districts. Putting aside the issue of whether the City can legally impose a fee in excess of the State-imposed cap, the City is currently estimating that the fee would be in the range of $30,000 - $40,000 per unit --- about 10 times what the State allows. And yes, the amount of the fee is tied to land values, so as the land values have gone up, so have the fees.

Similarly, the City park fee is directly tied to land value. In many parts of the City, prices for multifamily residential land are at or above $10 million per acre, which means that the park fee for an apartment project would be $60,000 per unit ($10 million per acre x 0.006 acres per unit, according to the City's formula). For a 400-unit apartment project, the park fee would be $24,000,000 --- which, needless to say, is a sizable chunk of change.

(Note: The park fee is based on value of the land that is proposed for development, not the value of the land which the City would potentially buy for a park, which tends to skew the fee upwards, since the value of prime residential acreage is much higher than the value of potential parkland.)


1 person likes this
Posted by Kathy S
a resident of Old Mountain View
on Sep 14, 2018 at 12:20 pm

California Ave, do you 7nder what authority the City is imposing this fee? This seems to me to be an invitation to litigation.


Like this comment
Posted by Kathy S
a resident of Old Mountain View
on Sep 14, 2018 at 12:22 pm

Kathy S is a registered user.

Sorry, not “7under” but “know under”


1 person likes this
Posted by Landfill and Toxins
a resident of Sylvan Park
on Sep 14, 2018 at 12:24 pm

Landfill and Toxins is a registered user.

I guess the City can ignore the safety of the land for housing and leave it to developers and buyers to BEWARE.


5 people like this
Posted by Mark Noack
a resident of Old Mountain View
on Sep 14, 2018 at 12:31 pm

Mark Noack is a registered user.

Hi @Nora,

I think @California Ave did an excellent job summing up the school and park fees.

In regard to schools, I would only add that the North Bayshore Precise Plan gives general direction for developers and school officials to negotiate on fees, land donations or transferring development rights to help build schools. Any new housing development is require to draft a local school strategy in partnership with the school districts. Right now, developers are saying they're in the dark as to how much they'll have to pay in school fees.


4 people like this
Posted by Steven Nelson
a resident of Cuesta Park
on Sep 14, 2018 at 2:03 pm

Steven Nelson is a registered user.

@Mark Noack and others, CORRECT - the school fees that are capped are limited by the state, Per Square Ft, and do not in any way match the cost to build a school, or additional classrooms, in this area.

SUNSET ON SHORELINE. The Shoreline special district (1969) is one of the extremely few remaining "quasi-RDA" (ReDevelopment Authority) tax diverting districts in the state. In the Tax year 2018-18 the official county report is that, just from the elementary district $9,447,982.12 was diverted, and from the MV-LA high school district $6,052,354.85 was diverted. pg. H-9
Web Link

As I have questioned before, during for instance the 2008 City Council LWV Council Candidate Forum, "hardball"
Web Link

or the 2010 MV-LA facilities bond campaign, "should Google, Microsoft and the Shoreline District businesses get out of regular school taxes (forever)?"
Web Link

? Council people/candidates - why continue DIVERTING $16 million per year from the schools? The schools can/if they choose/ use this general property tax money in a COP (public income mortgage) finance method to Build New School Facilities. This is not rare - MVWSD is using a COP and public yearly income to build a 450 student permanent neighborhood school facility in Whisman/Slater neighborhood. No "tricky legal agreements" needed!

Council candidates: please expect the "hardball question" to be submitted by me again at this year's LWV Council Candidate Forum. Half the money - is not enough.


Like this comment
Posted by COP
a resident of another community
on Sep 14, 2018 at 5:10 pm

COP notwithstanding, MVWSD is tying up over 12 acres of school land and buildings so as to get rental income. I don't think they get $16 Million per year from that. Still, they wouldn't need to buy new land if they gave up this rental income. It's very near to the area, though across 101. If there are a lot of kids in the new housing, they could run bus service to pick them up and take them home. It's Whisman School on Easy Street that belongs to MVWSD, as does MOST of the park land the city uses adjacent to the school site.


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