City officials’ plan to negotiate with a developer on the Hecker Pass property could be delayed by months due to a recent state law.
In a preliminary agenda posted on the city’s website days before the Gilroy City Council’s May 17 meeting, the council was scheduled to consider entering into an exclusive negotiating agreement with Select Contracts. The Canada-based company was one of two firms that submitted proposals to the city to develop Gilroy Gardens and the surrounding Hecker Pass property into a tourist destination.
But the item was removed from the council’s agenda as it could have been in conflict with Assembly Bill 1486, also known as the Surplus Land Act, City Attorney Andy Faber told the council.
That bill, approved in 2019, requires jurisdictions to make all “surplus” properties—defined broadly as land that is not currently in use by cities, counties and districts—to be made available to affordable housing developers before they can be sold.
In the case of the city-owned 536 acres at Hecker Pass, a request for proposals written by the city specifically mentioned a “long-term lease” with a company, Faber said, which would subject it to the Surplus Land Act.
As such, the council must declare the land surplus at a future meeting. When that happens, the city will then need to notify the state that it intends to sell the property, and the state’s housing department will need to notify affordable housing developers.
Under the law, affordable housing developers have 60 days to state their interest after a jurisdiction declares the property a surplus. If a developer does step forward, the jurisdiction must enter into “good-faith” negotiations with them for 90 days.
If no developer shows interest in the property, or if a deal cannot be reached in the subsequent 90 days, then the city can resume negotiations with its chosen developer for a tourism-focused site.
Faber noted that the city is not required by law to sell the property to a housing developer.
But the law has put a “monkey wrench” in the city’s plans to move forward with the property, Faber said, adding that it would cause a months-long delay.
“This is part of the state’s ratcheting up of pressure on cities to approve affordable housing,” he said. “The state is monitoring all cities quite closely.”Select Contracts’ proposal would construct a number of hiking and biking trails throughout the adjacent mountainside at various skill levels, as well as four zip lines down the mountain. It also calls for a “surf park” near the entrance to Gilroy Gardens.