School board will consider settlement behind closed doors
Gilroy – A high-stakes land dispute could be resolved Thursday – not in a San Jose courtroom, but in a closed-door Gilroy school board meeting.
For months, the school district has grappled with Glen Loma Ranch, the developers of a 360-acre mini-city in southwest Gilroy, over the price of a roughly nine-acre parcel, the site of the district’s new elementary school.
Now, the school district is poised to pay more than $10 million for the site, and the bitterly public fight appears bound for a quiet end. If school board members agree to an 11th-hour settlement offer, struck between attorneys Monday afternoon, GUSD will shell out more than double what it offered for the land a month ago – $4.1 million – and triple what the district accepted for it in 2002, when Glen Loma Group bought the parcel in what Judge John Garibaldi deemed a land swap.
That eight-digit price means fewer funds for the district’s new high school, a project that is already $12 million short, according to Assistant Superintendent Steve Brinkman.
“Where are they going to find this money?” asked parent Cynthia Harmel, a 13-year resident of Gilroy so rankled by the issue that she planned to sit in on the San Jose trial. Dismayed by Gilroy schools, she sends her children to public schools in Morgan Hill. “They’re always playing catch-up. A day late, and a dollar short.”
The details of the settlement offer won’t be made public until school board members vote on the plan, said Brinkman. But the price promises to top $10 million. A $10 million offer, extended by the school district on Sunday, was torpedoed by Glen Loma Group, said GUSD attorney Ethan Friedman.
“Things were looking bleak on Monday morning, in terms of settlement,” Friedman said. Then the Glen Loma Group relayed a new offer, bundled together with an offer to pay for off-site improvements: necessities like curbs, sidewalks, and sewage drains. “Once Glen Loma added these improvements to the settlement, I became more optimistic.”
Practical matters such as curbs and street lights had become more significant, as residential development at the 1,700-home Glen Loma Ranch lagged behind that of the elementary school, already under construction nearby.
“The expectation had been that Glen Loma would take care of them,” said Brinkman. But as the school took shape, officials began to fear that the off-site improvements, on residential streets owned by Glen Loma Group, wouldn’t keep pace. Friday night, representatives from GUSD, Glen Loma and the city’s engineering department met to discuss what needs to be done.
“We knew that one of the two entities would pick it up,” said city engineer Rick Smelser, “but the school district came to us now, to ensure that it would happen.”
Phone calls bounced between GUSD and Glen Loma attorneys until around 3pm Monday, when lawyers hit the magic number, paired with the offer for off-site improvements. GUSD attorneys and city engineers said they didn’t have an estimate of how much those improvements will cost, but the offer seems to have sweetened an otherwise bitter deal for GUSD.
“The district thought, as a public agency, it’s hard to get the best deal all the time,” explained Friedman. “A private property owner is going to be more competitive for contract orders.”
If school board members approve the settlement Thursday night in a closed-door meeting, the agreement will go on record Friday morning before a judge in San Jose. Until then, attorneys and GUSD representatives say, they won’t share the details of the proposed agreement.
That rankles with Harmel.
“How can they make an offer, but not tell the taxpayers?” she asked. “It’s annoying, and I’m already paying taxes on schools I don’t utilize. To pay for it, there’s probably going to be some other tax increase they’ll hit us with. ”
The legal dispute hasn’t made either party more popular. The prominent Filice family, 100 of whom compose Glen Loma Group, has been slammed as greedy; the school district has been criticized for mismanaging its assets, and losing millions in the process. GUSD sold the contested parcel to the Filices in 2002, paying about $3 million in the course of a land swap. Three years later, the district decided it wanted the land back, and snapped it up using eminent domain.
By then, nearby development had pumped up the price of the land: a fact attorneys were eager to point out in court, as they argued against presenting a jury with older appraisals of the site. Gilroy land values are escalating, they insisted, and five years later, South County real estate is a whole new ballgame.
“The Filices owned a piece of property that they would otherwise be allowed to sell to a willing buyer,” said attorney Bart Hechtman, representing Glen Loma Group. “All they sought through this case was the price that a willing buyer would pay. I don’t see how anyone could begrudge the Filices that. Anyone selling their house would want exactly the same thing.”
The take-home lesson for the school district? According to Brinkman, GUSD needs to make itself heard as the city develops.
“We’ve already become much more visible in public meetings,” he said. “You’ll see more of the school representing its interests.”
