Long-awaited agreement between Glen Loma Group and GUSD expected
to be signed next week
Gilroy – The school district will pay $10.8 million to settle a land dispute with the developers of the biggest housing project in Gilroy history.
The figure is part of a tentative agreement expected to be signed next week by Gilroy Unified School District and Glen Loma Corporation, the developer behind a 360-acre mini-city headed for southwest Gilroy.
GUSD and Glen Loma have wrangled for months over the value of a roughly nine-acre parcel in the future development. School officials used eminent domain to seize the land at the end of West Luchessa Avenue last year and have already started constructing a new elementary school.
“As far as the owners were concerned, they were willing to negotiate this long ago but they felt the district’s appraisal was not realistic or related to the market,” said Norman Matteoni, attorney for Glen Loma. “We had that position sustained by the trial judge. There was cooperation in the last week, and further evidence of that was the Filices’ willingness to advance the work for off-site improvements.”
As part of the agreement, Glen Loma, which represents more than 100 members of the Filice family, agreed to construct roads, sidewalks and other improvements leading to the school in time for a fall 2007 opening. The district has agreed to reimburse the developers for a percentage of the work.
The completion of such improvements helped break the legal stalemate before the Tuesday start of a jury trial, according to GUSD board president Tom Bundros.
“The bottom line is,” Bundros said, “the board felt that given the total circumstances, this was the best deal we could get.”
The settlement comes at a time of mounting frustration among school officials – and many parents and taxpayers – with the district’s budget woes. GUSD is $12 million short of the $109 million it needs for a new high school in northwest Gilroy, and the settlement with Glen Loma will only increase that deficit.
“Any dollar that we pay additional for the elementary school property is one less dollar we have for the high school,” said GUSD Assistant Superintendent Steve Brinkman.
The district plans to sell two pieces of land to offset some of the deficit, including a 10-acre parcel known as the Grove site, just west of the elementary school. Glen Loma has courted the school district for the Grove site in the past, but officials have been reluctant to sell. The high price commanded by the elementary school land was little consolation for Brinkman as the district looks to convert its own land into cash.
“Obviously the development climate is not as good as it was a year ago,” Brinkman said, “so we could be delayed in selling those two pieces, which is going to hurt our cash flow. We don’t want to sell them for less than we can get.”
Instead, Brinkman and other school officials will set about the task of scaling back plans for the high school project to bridge the deficit. As a starting point, they plan to meet Dec. 20 to reassess the projected construction costs for the high school.
The seeds of the GUSD-Glen Loma dispute were planted in 2002, when district officials traded the elementary school site and a second 11-acre parcel to Glen Loma in exchange for the 17-acre Ascension Solorsano Middle School site. The district struck the deal based on long-term plans to rehabilitate an elementary school in north Gilroy. Just three years later, GUSD decided that it made more sense to build an elementary school in southwest Gilroy: The price of redevelopment was prohibitive and the southwest clearly was going to need a new elementary school to serve the Glen Loma homes.
By that point, the Filice family had polished plans to transform the rolling hills along Santa Teresa Boulevard into a miniature city, complete with 1,693 homes, a fire station, public parks and two schools.
Serdar Tumgoren, Senior Staff Writer, covers City Hall for The Dispatch. Reach him at 847-7109 or st*******@************ch.com.
