Glen Loma’s attorney said client won’t settle for less than $10
million
Gilroy – Crippled by a series of rulings, the Gilroy school district could shell out millions more for 10 contested acres for a new elementary school.
School district attorneys are grappling with the Glen Loma Group – operated by members of the prominent Filice family – over the price of the parcel: a 10-acre slice of a 360-acre mini-city taking shape in southwest Gilroy. Glen Loma has priced the land at $14.4 million, almost three times what it paid the district in 2002 when school officials sold the site.
The dispute will go to trial Tuesday unless attorneys reach a last-minute settlement – and Glen Loma attorney Norm Matteoni says his client won’t settle for less than $10 million.
Gilroy schools have little cash to spare. Already $12 million short for the new Christopher High School, a costly settlement would only drain more funds from the project, said Assistant Superintendent Steve Brinkman. Glen Loma’s price has raised eyebrows among some, who question whether the Filices, a Gilroy name, have Gilroy’s best interests in mind. To others, it’s only fair that the district pay the current market rate for what it took.
GUSD has already snapped up the site using eminent domain, and the new school is rising along Santa Teresa Boulevard as lawyers dicker over evidence in San Jose. Wednesday, Judge John Garibaldi ruled that the district’s $3.3 million sale of the land to Glen Loma in 2002 couldn’t be presented to a jury, because the sale was part of a land swap, trading the 17-acre Ascension Solorsano Middle School site for the 10-acre plot and the 11-acre ‘Marigold’ site.
“This wasn’t a bonafide free market transaction,” Garibaldi said, adding that the Filices may have asked for several million dollars more if the school district hadn’t offered the Marigold site.
The gulf between the $3.3 million figure and the $14.4 million proposed by the Filices, three years later, has been the target of significant criticism in Gilroy. But the ruling bars school district lawyers from mentioning the prior $3.3 million price to the jury: a blow to the school district’s case.
“The school district is disappointed that the jury won’t consider the sale of the property a few years earlier,” said Ethan Friedman, an attorney representing GUSD. “I think it definitely sheds light on the property’s value in August 2005,” when GUSD took possession of the land.
Garibaldi’s ruling was the latest in a series of letdowns for the school district. Last week, the judge shot down both property appraisals submitted by GUSD, slamming the estimates’ “flawed reasoning.”
“This is so conjectural,” he said, “that it shouldn’t go to the jury at all.”
Both appraisals rested on the premise that a school was integral to Glen Loma plans, a premise that Garibaldi rejected over GUSD attorneys’ objections. Though a school figured in city discussions of the ambitious Glen Loma Ranch project, the judge said, developers never formally committed space to a school. Instead, he said, the land must be appraised without regard to the school district’s plans: as pricier, low-density residential real estate.
The ruling pulled the rug out from under the district’s case, and sent appraiser Michael Waldron scrambling to complete a new appraisal by Friday. If Waldron’s new estimate hits $10 million, the Filices may consider a settlement, said attorney Matteoni.
GUSD’s highest offer to date was $7.1 million, presented at a pre-trial settlement conference last month.
Other rulings prohibited GUSD from presenting older sales, completed in 2000 and 2002, as comparable sales before a jury. Matteoni applauded the ruling.
“The 2000 sales would mislead the jury in light of the escalating prices of land in Gilroy,” he said. “It wouldn’t present a fair picture of land values in late 2005,” when the school took control of the property.
Meanwhile, John Filice will address the jury as an expert witness on his own behalf: a GUSD motion to strike the property owner as an expert witness failed. As long as Filice seconds the appraisal submitted by Chris Carneghi on behalf of Glen Loma, he can address the jury, referencing his qualifications as a long-time land developer and property owner.
Amid the mostly negative rulings, the school district can find a silver lining: Land sales in Morgan Hill were OK’d for presentation in court, and two of the district’s three motions were approved, one to bar all prior appraisals of the property, another to exclude mention of GUSD’s budget or property holdings in court. But the rulings are unlikely to swing the case, attorneys said: the latter two barely met with resistance from the Filices’ attorneys.
“Everything’s favorable for us,” Matteoni said, calling the Marigold decision “the key ruling – the rest are clarifications.”
