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Coyote Valley Failure Shows Flawed Process

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    Friday, March 28, 2008Coyote Valley failure shows flawed processSilicon Valley / San Jose Business Journal - by Sharon SimonsonIn January 2005, a group of
    Message 1 of 1 , Apr 3, 2008
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      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
      force's plan.

      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
      the plug.

      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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