445 acres of the ‘660’ farmland sold off or optioned for future
development
Gilroy – Investors have snapped up nearly all of the buildable acres in the city’s infamous “660” area, a vast swath of farmland east of Gilroy that inspired a fierce land use battle five years ago and led to the county’s first agricultural preservation policy.
Last week, Vinh Sanh Development LLC paid “pretty close” to $15.1 million for 232 acres just east of the Gilroy Premium Outlets, according to Erik Hallgrimson, a broker with Community Property Services, in Santa Clara, who brokered the deal.
The land was sold by a group of seven property owners, with James Jerome McCarthy Jr. as the largest landholder, to Los Angeles-based developers Tuong Vinh Tran and Huong Le Tran.
The sale is the latest in a series of land deals involving the 660 acres that stretch toward the eastern foothills. An adjacent 94 acres sold late last year, and in February, 119 acres bordering the outlets were tied up an investor with a three-year purchase option.
The combined 445 acres comprise the bulk of land capable of development in the 660 area, with more than 200 acres by Llagas Creek set aside as open space.
The portion of the 660 earmarked for development is more than five times the size of the Pacheco Pass Shopping Center along Highway 152. The vast swath of land, considered some of the best agricultural land in the region, is still actively farmed.
Hallgrimson predicted that a development proposal for the land, now earmarked for industrial use under the city’s 20-year plan, would come forward in the next five to seven years.
“Deals have been set in motion to develop the land, but it will take some time to get there,” he said.
Hallgrimson could not speak on the possibility of a conversion to commercial use, a plan that could build on the success of the nearby outlets or the big-box stores along Pacheco Pass.
Such a move could speed up the time frame for development, according to Planning Manager Bill Faus.
“Right now we have an inventory of industrial land in excess of a 50-year supply,” Faus said. “I think it leads one to believe it’s going to be something other than industrial.”
A commercial designation may stand a better chance of approval from the Local Agency Formation Commission, a regional land-use agency that wields veto power over annexation requests. The agency frowns on requests to incorporate county lands such as the 660 when a city has large, unused inventories under the same category.
Even with a zone change to commercial – a category of land that is rapidly evaporating in Gilroy – investors face an uphill battle with LAFCO.
The city has had a rocky relationship with agency for the last five years, ever since local officials told LAFCO staff members they had no business meddling in the decision to include the 660 within Gilroy’s 20-year development boundary. The move, ultimately approved in June 2002, cleared the way for development of the land by 2020, though the property remains outside the city borders and cannot be incorporated without LAFCO permission.
Pressure from LAFCO officials, farmers and local environmentalists during the 660 debate led the city to develop a policy requiring preservation of one acre of farmland for every acre developed.
“This is the area that precipitated the whole discussion, that prompted all of the agricultural mitigation policies that came forward,” Faus said.
Carolyn Tognetti, a leading environmental advocate who led the charge for the preservation policy, is also among the owners of the 660 land. Her husband holds a 10 percent stake in the 232 acres sold last week.
She would not disclose details about the deal, but hopes the city will toughen up its farmland preservation policy before any development takes place.
LAFCO officials recently criticized the city’s policy for allowing development-related preservation to take place years after officials have signed off on building permits. She prefers to see preservation take place at the time land is annexed, a more stringent measure that could spell millions of dollars in up-front development costs on large projects. Tognetti also has criticized major projects in Gilroy for sidestepping the preservation policy.
“People learn ways to get around things,” she said. “That’s why the city and LAFCO need to stay vigilant.”
What is 660
The farmland east of the Gilroy Premium Outlets inspired intense debate five years ago when leaders decided to clear the way for its development. The land – 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. It includes 234 acres dedicated as open space.
