After a year of closed-door negotiations, the Los Altos School District announced Friday that it will purchase land for a new school in the San Antonio shopping center for a staggering $155 million.
The price tag is sure to break records as one of the most expensive school land transactions in the Bay Area. But most of the cost will be covered, thanks to help from the city of Mountain View and local developers. District officials estimate it will cost the district only $27.7 million.
Last year, the school district revealed its intent to buy the 11.65 acres of land at the corner of California Street and Showers Drive, a large portion of the San Antonio shopping center that includes the Kohl's department store and several other commercial tenants. The intent is to demolish the buildings and create a school and adjacent park space by 2024.
The negotiated price between the school district and the current property owner, Federal Realty, comes out to roughly $13.3 million per acre. Federal Realty will continue to own a large chunk of the shopping center to the south of the proposed school, including the Walmart.
The transaction relies on a complex combination of deals with the city and developers seeking to build more offices and housing elsewhere in Mountain View, known as a transfer of development rights. The school district will immediately sell two acres of the newly purchased land to the city of Mountain View for $20 million to become a city-owned park. Mountain View will also contribute $23 million in city park fees for joint use of green space and athletic facilities at the future school campus.
The school district is also agreeing not to fully develop the land to the maximum of its high-density zoning, and has been permitting to "sell" to developers the remaining 610,000 square feet of density rights. This transfer of development rights (TDRs) will generate $79.3 million to offset the cost of the land purchase.
Assuming the district spends the first few years planning for the future school, current shopping center tenants will continue to occupy the space and pay rent. Allowing the tenants to operate for three years would provide $7.5 million in net rental income, according to a district staff report.
School board members are scheduled to discuss the terms of the purchase at the Monday, June 10 board meeting, and are tentatively scheduled to vote on the real estate purchase on June 19.
For several years, Los Altos district administrators and school board members have been on the hunt for land to build a new school, with a clear preference for a school north of El Camino Real in Mountain View. While most of the district is projected to have flat or declining enrollment in the coming years, housing growth in the portion of the district that's in Mountain View is expected to create a growing need for a school to serve the area's children.
Critics have long argued that the school district's bid for expensive real estate is misguided, pointing to declining enrollment and opportunities to close, relocate or co-locate schools on existing district-owned land. But school board members maintain that the purchase is a prudent use of taxpayer funds and an important asset as Mountain View's population spikes in the coming decades.
With a purchase now close on the horizon, it's still an open question what kind of school will go there. One idea, put forth by trustees in April, calls for relocating Egan Junior High School to the new Mountain View site. The proposal was met with an icy reception from district residents, and a vote on displacing Egan was delayed until next year.
A district task force concluded that placing Bullis Charter School at the Mountain View site would be the best option, but that is likely an impossibility. Not only is the charter school planning to grow to between 1,100 and 1,200 students in the coming years -- making it a tight fit at a campus of less than 10 acres -- but the city of Mountain View imposed limitations on what kind of school can be placed at the San Antonio site.
As part of the agreement with the city, the Los Altos School District agreed that the school must serve neighborhood students. That means it could be a traditional elementary, middle or junior high school with boundaries encompassing Mountain View residents in the area, and Bullis Charter School could only be moved to the site if nearby families are given a preference in the charter school's enrollment lottery. Bullis' leadership has not agreed to such an arrangement.