4,000 Home Development Off the Table

Overwhelmed by public criticism and two lawsuits, the developers of the biggest housing project in Gilroy’s history have pulled their application to take more time to sell it to the public.

Landowners proposed 4,000 homes including 1,500 units for “active seniors,” two schools and parks for the 721-acre tract of farmland bordered by Monterey, Santa Teresa, Fitzgerald and Day roads.

The land would have to be annexed by the city and would need approval from the county’s Local Agency Formation Commission (LAFCO). The city voted Dec. 7 to move forward.

However, the developers on Wednesday temporarily shelved the project, saying they were advised by Mayor Perry Woodward to do so.

“I asked the applicant to please rescind their application to allow for time for the city and greater community to better understand the proposal, the benefits to our community, how it gains local control and fits within the collective long-term vision of Gilroy’s future,” said Woodward, a supporter of the project, in a press release.

Added developer Skip Spiering: “By heeding the mayor’s request to pull our application for consideration at this time, we have chosen to temporarily take a step back. We will continue to work with the city of Gilroy and the local community to help them understand the long-term vision of Rancho Los Olivos and will engage community leaders, stakeholders and neighbors as we complete the 2040 General Plan.”

The developers of what could be a $3 billion project involving 27 landowners, including Jeff Martin, who owns 400 of the 721 acres. In a big public relations push, they have changed the name from Rancho 101 to Rancho Los Olivos (Ranch of the Olives) and launched a website (rancho-olivos.com) and Facebook page (Rancho Los Olivos Community), looking to improve their image. They have also hired a public relations firm, Farmhouse Communications, spearheaded by Kristina Chavez Wyatt, who as communications director, led the unsuccessful oil company-funded opposition to San Benito County’s 2014 anti-fracking referendum.

The City Council is divided 3-3 on the proposal, with a seventh member due to be selected Jan. 25. The Planning Commission voted unanimously against it. Mayor Perry Woodward, Councilman Peter Leroe-Muñoz and Terri Aulman voted for it, while Dion Bracco, Cat Tucker and Roland Velasco opposed.

Spiering put a positive spin on the hold and the project, which was opposed by 2,000 people who signed an online petition.

“We are experiencing a groundswell of support from community members now that they are taking time to understand the details of the proposal and how it fits within the city’s long-term planning. The Rancho Los Olivos plan will address existing needs such as major roadway improvements, new schools and a much-anticipated active adult community.”

Meanwhile, other opponents of the project weighed in last week.

LAFCO and a group of developers filed separate suits asking the courts to stop the project, claiming that it is illegal, that a big environmental problem would cause too much demand for fire and police, and that its reviews were badly managed by the city.

The LAFCO suit contends that the approval of the project by the council was “improper“ and that “Gilroy violated CEQA (the California Environmental Quality Act) in numerous ways.” The city voted in December to send the proposal to LAFCO for review, but the agency filed suit to stop the plan, even before it had a chance to vote on it.

The suit says the “site consists of largely prime agricultural land and that the city wants to include these lands in its [Urban Service Area] even as the city has substantial amounts of land within its current boundaries that are vacant or underutilized.”

The agency asks the court “to set aside certification of the EIR,” and to rescind all actions related to its approval.

Woodward said he’s not surprised by the suit and thinks the city and LAFCO can negotiate a compromise.

“We will work with LAFCO to make sure their concerns are addressed,” he said. “When you have two public agencies, they will work together to find common ground.”

Woodward said such suits are common in big developments and factor into why it takes so long to build in California.

“We’ve been saying all along that this will take 10 to 15 years. This isn’t a short-range project. We will have a discussion with LAFCO and if we can find a middle ground, then we will move forward.”

According to the LAFCO suit, the city failed to conduct a sufficient environmental review for the project, given that it has the potential to cause a number of foreseeable and significant direct and indirect impacts. These include impacts on aesthetics, agriculture, air quality, biological resources, geology and soils, hydrology and water quality, water resources, cultural resources, greenhouse gases, hazards, health risks, land use and planning, minerals, noise, population and housing, public services, recreation, transportation, utilities, cumulative impacts to the above, growth-inducing impacts, and other types of environmental impacts, including construction-related and operational impacts.

LAFCO has also asked that the city pick up its legal fees, which could be considerable.

The second lawsuit, filed by developers Ken Kerley and Daniel Fiorio, argues that they were told not to pursue their plans to build housing in south Gilroy and then found the city approved the Rancho Los Olivos plan.

Their suit challenges the City Council’s Dec. 7 decision to approve the 721-acre project and certify the environmental impact report, without first analyzing and mitigating potential environmental impacts.

The landowners’ lawsuit also contends that the City Council’s approval of the project causes the city’s general plan to be “internally inconsistent,” in violation of state planning and zoning laws.

Both suits also name the project’s investors and landowners, including Martin Limited Partnership, Wren Investors LLC, and Mark Hewell.

Kerley and Fiorio are no strangers to City Hall. In July 2013 they were part of a consortium of landowners that submitted an application to amend the city’s Urban Service Area to encompass approximately 150 acres in the unincorporated south Gilroy neighborhood district (called South Gilroy USA proposal in the lawsuit), where the two own property.

The petitioners allege that in January 2014, city staff provided them with an evaluation of the South Gilroy USA proposal and advised them to withdraw their application and not to resubmit until after the city adopted its 2040 general plan, which was then underway. The petitioners followed the recommendation and withdrew their application five days later.

In July 2014, the city accepted Martin Limited Partnership’s application to add 721 acres into the city’s USA boundary even as the city was still developing its 2040 general plan, contrary to the advice allegedly given to the South Gilroy USA landowners.

Approval of the 721-acre project is “premature and should await adoption of the 2040 general Plan,” the lawsuit states.

The general plan was approved by the City Council on Jan. 4, clearing the way for an environmental review and final reading sometime this summer.
Interim City Administrator Ed Tewes said he expects that the lawsuits would be moot if the city agrees Monday to withdraw its request to annex the land for the project. He said council will also consider decertifying the environmental impact report it agreed to in December.