Los Altos School District, Federal Realty, Close on $155MM Deal for New School Site in Mountain View

Los Altos School District, Greystar, Federal Realty, San Antonio Shopping Center, Mountain View
Image Courtesy of Federal Realty

By Meghan Hall

The Los Altos School District has officially ended a years-long effort to find a suitable site for a new school. In a transaction that recently closed, LASD has acquired 11.65 acres at the San Antonio Shopping Center in Mountain View for $155 million. The transaction was unanimously voted for by the LASD Board of Trustees in June of this year, permitting the district to purchase the property from Federal Realty in an effort to build new education facilities and address site sharing and overcrowding at its schools.

“This is a huge win and great value for our community.  With this property, we will construct a new school, provide recreational facilities and gain a neighborhood park in an area of our community that lacks these important amenities,” said Jessica Speiser, President of the LASD Board of Trustees in a statement. “This achievement would not have been possible without collaboration from the City of Mountain View and we are grateful for their partnership as we move ahead with next steps to protect academic excellence for all of our students.”

However, despite the $155 million price tag, LASD will pay less than $28 million for the land. Sourced from local developers, a Transfer of Development Rights program will put more than $79 million towards the acquisition. Additionally, park-in-lieu funds from the city for the creation of a neighborhood park—required by code—and other financial contributions will produce another $48 million.

According to The Mercury News, who first reported on the transaction, Federal Realty is expected to provide tenant services to LASD’s current retail tenants until leases roll. The site now owned by LASD is home to tenants such as Kohl’s and 24 Hour Fitness.

Federal Realty originally acquired the 376,000 square foot San Antonio Shopping Center in January of 2015 for $62.2 million. The acquisition was made using 58,000 downREIT units, $18 million in cash and an additional $18.7 million of fixed rate debt.

The LASD has been looking for solutions to increased enrollment since 2012. Currently, the district has ten schools on nine sites, and more than 5,000 students are enrolled. According to the school district, LASD has not seen such high numbers since the 1970s, when the district had 12 schools.

LASD had originally looked at the Old Mill/Safeway site for a new school, but came up against a property owner unwilling to sell. In July of 2018, the Mountain View City Council approved a 632-unit apartment project previously proposed by the property owner and Greystar for the site. Industry reporting indicated that LASD was originally prepared to use eminent domain in order to acquire the site.

However, the district shifted gears and pursued the San Antonio Center site instead. Exactly how the LASD will move forward and what type of school will be built has yet to be determined, although many agree that the site’s acquisition in and of itself is a healthy step forward.

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