Eden Housing, Grosvenor and SummerHill Sue Los Gatos Over Proposed North 40 Development Rejection

North 40 Specific Plan Los Gatos Santa Clara Eden Housing Grosvenor SummerHill Homes Regional Housing Needs Allocation RHNA Silicon Valley
Photo courtesy of claremontproperties.com

On Thursday, October 6, 2016, the fight over the North 40 Specific Plan in Los Gatos reached what could be described as a nadir in the city’s ability to adopt a plan to redevelop a 44-acre area bounded by Highway 85, Lark Avenue, Highway 17 and Los Gatos Boulevard for a large mixed-use development. Frustrated over the results of series of recent meetings with the city, the three developers who have jointly worked for years with the Silicon Valley municipality to develop a suitable plan have filed a lawsuit on Thursday in Santa Clara county against the town of Los Gatos in hopes that courts will find a resolution for both parties.

The three parties, Eden Housing, Grosvenor and SummerHill Homes, were not available for comment, however through a representative they stated the following: “We regret the Town of Los Gatos denied our application to build 270 market rate homes and 50 affordable homes for very low income seniors, new retail for the North end of Town, and an agrarian-based open space plan that celebrates the history of the site. Given the Town Council’s decision not to support a project that adheres to the North Forty Specific Plan, and state-mandated requirements for construction of affordable housing, we are in the unfortunate situation of seeking resolution through the courts.”

Representatives of Los Gatos were not available for comment in time for this publishing.

The three parties cited the California legislature as the basis for their suit. The availability of housing is of vital statewide importance, and this requires the cooperative participation of government and the private sector in an effort to expand housing opportunities and accommodate housing needs of Californians of all economic levels. Further, local and state governments have a responsibility to use the powers vested in them to facilitate the improvement and development of housing. The legislature, according to the lawsuit, has passed three laws to facilitate and expedite the development of housing. These are the Housing Element Law, the Housing Accountability Act and the Density Bonus Law, which the plaintiffs are alleging the town broke when on September 1st, 2016 by a 3-2 vote the town’s council denied the project.

The lawsuit outlined in detail the town’s housing element obligations, which mandated by law require all California municipalities to adopt housing elements as part of their general plans. This is a process where local governments work with the private sector to adequately address housing needs and demand through land use planning and regulatory schemes. One of the steps also includes an eight-year plan that through the Association of Bay Area Governments allocates housing requirements to its member communities, which in turn must adopt plans that allow for development to occur in specific time frames. This Regional Housing Needs Allocation (RHNA) requirement for Los Gatos is 619 total housing units from January 31, 2015 to January 31, 2023. The town is required by sate law then to create a set of strategies and identify specific sites for development in order to satisfy its allocation.

The North 40 Area was identified though such process as the primary site for new housing to fulfill the town’s RHNA requirement. This process included the town’s council forming a Housing Element Advisory Board, made up of council members, planning commissioners, General Plan Committee members and residents appointed by the town council. Current town council members Marcio Sayoc and Marcia Jensen served on this board, as did Los Gatos mayor Barbara Spector. The board met 15 times starting on March 27, 2014 to provide input and consideration for multiple locations within the town.

On May 5, 2015, Los Gatos adopted its 2015-2023 Housing Element that stated that within a three year period, the town had to adopt a Specific Plan for the North 40 area to rezone 13.5 acres and allow “by-right” residential development with a minimum density of 20 units per acre.

The North 40 Specific Plan provided a maximum allowable development capacity of 501,000 square feet of commercial space (existing and new) in addition to 270 residential units. The town also adopted guiding principles for the development in 2012 that stipulated that the North 40 will look and feel like Los Gatos, embrace the hillside views, trees and open space, address the town’s residential and/or commercial unmet needs and minimize or mitigate impacts on town infrastructure, schools and other services.

The plaintiffs’ project complied with or exceeded all the objective standards described in the Specific Plan, including replacing 5 times the number of trees, exceeding the residential setback requirement, keeping the structures below the height maximum, exceeding the residential and commercial parking requirements. The project would also allocate 39 percent of the development to open space against the required 20 percent, or which 85 percent would be publicly accessible versus the required 20 percent.

The development team also agreed to pay $250,000 to construct a bicycle path over Highway 17, acquire two acres of land for the expansion of school facilities and pay an additional $23,500 per market rate dwelling (current requirement is $4,600 for a 1,400 square dwelling) for statutory school fees.

The planning commission held four public meetings from April to July 2016, at the conclusion of which it recommended to the town council to deny the project. The plaintiffs allege the seven findings all “were expressions of subjective opinions and/or were demonstrably inconsistent with the Specific Plan’s objective standards.”

However, in the four town council meetings that followed the planning commission decision, the city staff found that “the proposed applications meet the technical requirements of the Specific Plan. These are: Development Capacity, Development Standards and Design Guidelines.”

The town’s architectural consultant, the Historic Preservation Committee and the town’s planning staff all had determined that the proposal was consistent with the objective standards set forth in the General Plan and Specific Plan, which meant the town was legally obligated to approve the project, states the lawsuit.

Yet, the town took a different path. At the August 16, 2016 meeting, which most hoped would send the project toward its conclusion and approval, several issues were raised by the town’s council members in opposition to the project, which even its outside counsel challenged. The counsel’s opinion strongly supported the legal position of the developers and rejected the legal challenges to the project raised by some of its opponents. The town decided to reconvene on September 1, 2016 for a final vote.

At that final meeting, the town staff reiterated that “the town can only modify of deny the project based upon its determination that the application does no comply with the objective North 40 Specific Plan standards and criteria.”

Mayor Spector and vice mayor Sayoc were joined by council member Leonardis to form a majority vote against the development, however.

Leonardis’ main objection was over too much housing. “What we are really voting for is a whole lot of housing, some senior housing on top of a market, so it’s difficult to see the future, and I don’t like that uncertainty,” he stated at the meeting.

Vice mayor Sayoc said the development did not make sense to her. “I think if we had an opportunity to move the layout, I think we could have spread a little bit of the residential units out, and I think we would have a better comprehensive site plan that we can approve,” she stated, adding that perhaps a better project may come along. “This may be the only one, but I hesitate to award a project with the majority of the housing allocation that could disproportionally hurt chances of a better site design in the future.”

Now, after 15 years of review, numerous workshops, open houses and public meetings, the adoption of the North 40 Specific Plan, a rich development proposal and by all accounts a successful attempt to meet all the objective standards of the plan, it will be the courts that will decide the next steps in this prolonged Silicon Valley development saga.

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