$5 million paid for 94 acres of the land in eastern Gilroy
Gilroy – A former Morgan Hill councilwoman and her investment group have paid $5 million for 94 acres in east Gilroy, a sizable chunk of vast farmland that inspired one of the city’s most heated land-use battles of the last decade. The property could be the first of two big parcels in the “660” farmland area that sells in the next few years.
Lifelong Gilroy resident Jacquelyn Keaveney sold her family’s 94 acres in October to Gilroy Investment Group LLC. The partnership includes former Morgan Hill councilwoman and developer Hedy L. Chang, her husband Chih-Pei Chang, and Gilroy pediatrician John Y. Huang, according to county land records and a state database of limited liability companies. All three investment partners were out of the country on vacation and could not be reached for comment.
Their land borders a 119-acre parcel that a second investor has tied down with a three-year purchase option, according to Sylvester “Babe” Heinberg, a broker with Zubow Realty, in Morgan Hill, who closed both deals.
The combined 213 acres, which run south from Leavesley Road and lie just east of the Gilroy Premium Outlets, are zoned for use as an industrial campus. Possible tenants include research and development firms and other light industrial companies, though Heinberg sees little chance of such a use any time soon.
“I don’t think there’s an industrial proposal at this stage,” he said. “There’s so much vacant space in industrial at this time. It’s just unbelievable how many thousands upon thousands of square feet there are. … I don’t know what the feeling is of this group that I sold it to, but I think it’s a longer-term investment.”
Heinberg said a contractual agreement bars him from revealing who secured the option-to-buy on the larger parcel. But he said the contract, signed in February, extends through 2009.
The land deals come four years after city leaders, environmentalists, farmers and property owners clashed over the fate of the “660.” The vast swath of farmland – which actually measures 664 acres – stretches toward the eastern foothills and remains some of the best agricultural land in the region.
In 2002, after five years of intense planning and polarizing debate, city leaders agreed to include the by-then infamous “660” within the city’s General Plan boundary. The move, which included a rezoning for industrial use, clears the way for the city to fold the land into its borders and for development to occur by 2020. The land remains outside the city limits.
The 660 became a flashpoint in the 2001 election and inspired a lawsuit by Save Open Space Gilroy, a local environmental group that accused the city of inadequately studying the impacts of including the land within the city’s 20-year development boundary.
Supporters of 660 development said the untouched land would lure big companies and jobs sooner than existing industrial land in Gilroy. Opponents like SOS said the move would generate sprawl and create traffic nightmares.
The city emerged victorious from the lawsuit and added the 660 to its GP boundary in June 2002.
But while advocates of inclusion won that battle, the prospects for development remain slim.
In order to develop, the city would have to bring the county land within its borders, a move that would require permission from the Local Agency Formation Commission, a regional land use agency that wields veto power over annexation requests. And despite a decision this week to clear the way for a small 26-acre annexation, LAFCO has shown little love for the city in recent years.
Relations with LAFCO soured during the 660 debate, when city officials told the agency it had no business interfering in the decision to bring the land within its development boundary.
“They chose to participate and to add their two cents worth, and when we told them that they’re not part of this process, they got really mad at us,” recalled Councilman Craig Gartman, one of five council members who backed 660 inclusion.
“We wanted to make sure it was in the 20-year boundary because we said there’s a possibility that we may need this land for industrial development in that period of time,” he added. “These people may be buying things now while it’s relatively inexpensive in the hopes that in 10 years from now they may be able to make a profit. It’s all speculation because there’s nothing coming before us.”
And if it does, the city faces a tough battle getting through LAFCO, according to Connie Rogers, an SOS member who did not see cause for worry in the recent land deals.
“I hope it will be a really long – term investment,” she said.
Correction: An April 14 front-page story detailing the latest sale of farmland in the “660” area east of Gilroy misstated the members of the development group behind the deal. Due to a reporter’s error, the story stated that former Morgan Hill Councilwoman Hedy Chang, her husband Chih-Pei, and Gilroy pediatrician John Y. Huang are members of Gilroy Investment Group, the entity that purchased the 94 acre parcel. Chang dissolved her investment group – Gilroy Investment Group LP – in the late ’80s. The entity involved in the recent 660 land deal – Gilroy Investment Group LLC – was formed in late 2005. The Milpitas-based group is made up of David Tran, Henry Tran and Tina Tran, according to records from the Secretary of State.
What is the 660?
The farmland – which actually measures 664 acres – stretches toward the eastern foothills and is
bounded on the north by Leavesley Road; on the west by the Gilroy Outlets; on the south by Ronan Channel; and the east by
Llagas Creek. The land inspired debate five years ago, when
leaders decided to clear the way for its development. The area includes more than 200 acres dedicated as open space.
