Coyote Valley Failure Shows Flawed Process
Friday, March 28, 2008
Coyote Valley failure shows flawed process
Silicon Valley / San Jose Business Journal - by Sharon Simonson
In January 2005, a group of Coyote Valley property owners warned the
city of San Jose not to renege on past guarantees.
But when a massive, three-volume task force report came out in October
2007, the assessment undermined those commitments. The report laid out
a master plan for the 7,000-acre development that ignored the property
lines and rights of Coyote Valley landowners who had sunk millions
into the development of their land.
Five months later, the Coyote Valley vision was dead.
But Coyote Valley isn't a one-time, developer-rights-versus-city-
ideals quagmire. Instead, the failed Coyote Valley effort is the
latest in a recent string of San Jose planning initiatives that have
led to lawsuits, community dissent and millions of dollars spent on
land-planning efforts that have never come to fruition.
San Jose Mayor Chuck Reed is unapologetic. He has been crystal clear
since his election that he opposes the conversion of the city's
industrial land to housing. For all of its complexities, the Coyote
Valley task force "vision" comes down to just that, he says.
"Elections have consequences, and there was a definite change in
direction," Reed says.
Coyote Valley falls apart
The seeds of the current troubles were planted in January 2005, when
the managers for the Coyote Valley Research Park (CVRP) sent a letter
to San Jose former Planning Director Steven Haase and City Attorney
Richard "Rick" Doyle. The letter voiced concern over the city's
CVRP, along with one-time development partner Cisco Systems Inc., owns
nearly all of the 385 acres of developable land in North Coyote
Valley. CVRP holds the rights to develop more than 4 million square
feet of offices, enough capacity to house 15,000 workers, and had
spent millions to attain development rights and millions more to build
roads and maintain civil works. In an agreement with the city, the
development rights are good until 2020.
But CVRP was worried because the development plan being discussed at
the time by the 20-member city-appointed citizens' task force did not
acknowledge CVRP's development rights, nor those of Cisco and at least
two other large property owners. Cisco, which has the rights to
develop more than 2 million square feet of offices in Coyote,
expressed similar concerns.
Instead, the task force decided to look at the entire 7,000-acre
valley like a single palette. The group drew up an elaborate
development plan that ignored the landowner rights of nearly 300
Coyote Valley property owners to create a tightly knit, master-planned
and futuristic community that would champion the tenets of "smart
growth" and put Silicon Valley at the front of progressive land-
planning theory nationwide.
How that vision would jibe with CVRP's development rights and the
ownership interests of the property owners wasn't discussed in the
monthly task-force meetings.
Meanwhile, CVRP was spending millions of dollars to build roads and
drainage basins required under its development rights and considering
its own, separate development plans.
But those separate plans clashed in March 2007 when the city published
an environmental impact report that looked at the effects of the task
That summer, CVRP challenged the EIR in another letter, asserting the
report was a threat to its development rights. This time, Cisco
lawyers joined the argument. San Jose's planning department admitted
in October there were problems with Coyote Valley's EIR and that the
CVRP was right.
Coyote Valley home builders had been financing the efforts of the task
force. By March 2008, the home builders had invested $17.2 million.
Fed up with additional costs because of the flubbed EIR, they pulled
Reed is unsympathetic. Developers, no matter how much money they
spend, can't buy a planning decision, he says.
History repeats itself
The home builders' decision had a familiar ring. Last summer,
billionaire property owner and investor Carl Berg sued San Jose for
what he claimed was botched city planning in the San Jose Evergreen
In that case, developers, at the city's request, had agreed to give
the city $8.8 million to pay for city staff time and consultants who
would create the "Evergreen Smart Growth Strategy." No such plan
materialized, and the lawsuit is pending.
In early 2006, Santa Clara County and neighboring cities also sued San
Jose over problems with another city land plan. This one was an effort
to jump-start redevelopment on 5,000 acres along North First Street.
Developers said the city's plan failed to acknowledge the increase in
traffic on the arterial roads into San Jose. A judge agreed and
ordered the city to solve the problem.
The plan, a central part of San Jose's economic development strategy,
continues to face challenges from the Santa Clara Unified School
Now Coyote Valley is the latest in a chain of problem projects.
For his part, Reed says it is a good thing that the CVRP took the
position it ultimately did, and the Coyote home builders finally
accepted the new political realities in San Jose.
Sharon Simonson can be reached at (408) 299-1853 or
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