Sierra Club will seek $100 million mitigation
Silicon Valley / San Jose Business Journal - by Sharon Simonson
A national environmental group and its political allies intend to ask the developers of San Jose's Coyote Valley to fork over as much as $100 million to pay for land acquisition to compensate for the loss of prime agricultural property and damage to the air, water and soil, if the development occurs.
The sum, disclosed in a private e-mail from the Sierra Club's regional director, Melissa Hippard, to Sierra Club members, is $85 million more than has been earmarked publicly by city of San Jose consultants to pay for environmental effects of the 3,500-acre planned community.
Based on current estimates of about $1.6 billion in infrastructure costs for Coyote Valley, $100 million amounts to a 6 percent surcharge for environmental advancement, when -- and if -- the mammoth project ever unfolds.
Ms. Hippard also wrote that to ensure the requests are met with enthusiasm, the Sierra Club and its compatriots could promise developers that they would file no lawsuits challenging environmental assessments or other parts of the proposed development plan once it is approved by the San Jose City Council. In addition, they could pledge not to launch a voter referendum to try to overturn the council's ultimate embrace of development, again if their requests were rewarded.
The e-mail, which Ms. Hippard says was intended to be confidential, was forwarded to the Business Journal by a member of the Sierra Club who had received it and was alarmed by what he believed was a questionable way of doing business.
"I ... am becoming concerned about the tactics of the environmental groups which are getting away from their mission of protecting the environment. They now seem to be getting into the area of extortion," the member wrote.
He did not wish to be identified, saying it would ruin his ability to influence his fellow Sierra Club members and staff.
Ms. Hippard defended the approach, explaining that options like lawsuits and voter referendums are all part of educating members about how advocacy groups such as the Sierra Club operate and prepare for eventual discussions with developers. The group intends to go to developers early next year with its proposals, she added.
"This is about anyone going into negotiations knowing what their bottom line is, and what their range of options are if the bottom line isn't met," she said. "The Sierra Club's preference is to work through the current public process. Lawsuits are the last thing we want to do."
The $100 million price tag, which she stressed is preliminary, is not in any way unreasonable in light of the value of development ultimately planned for Coyote Valley, she added. More than 13 million square feet of office and industrial property development and more than 26,000 new homes are envisioned right now. That's enough space to accommodate some 50,000 workers and about 75,000 new residents.
Developers with holdings in Coyote Valley could not be reached for comment. The city of San Jose was closed and planning staff could not be reached for comment.
The e-mail is the latest in a series of events that have raised questions about how the Coyote Valley planning process is proceeding and where it ultimately will lead. San Jose Mayor Ron Gonzales, who has championed the Coyote Valley plan as an economic development tool for the city, is no longer expected to be in office when the plan comes to the full council for its vote because an environmental analysis of the proposed development is taking longer than initially thought. Mr. Gonzales' second term ends in December 2006.
In addition, the city's planning director, Stephen Haase, is leaving San Jose. The planning process is being managed by Mr. Haase's office.
Beyond that, surprise plans by Gavilan College to put an 80-acre campus in the heart of Coyote Valley unveiled this fall have thrown a huge wrench into planning efforts. Without the college, the Coyote Valley development plan already relies on nearly every square inch of land in the 3,500 acres to meet the city's square footage goals for workplace development and new housing. It is unclear how those goals would still be met while also accommodating the new Gavilan campus.
Ms. Hippard's e-mail also raises questions about how groups such as hers interact with sitting Coyote Valley Task Force members. The 20-member task force, which Mayor Gonzales co-chairs along with Councilman Forrest Williams, has been meeting since 2002 to come up with a land-use plan for Coyote Valley. Among other things, the plan is to outline what kinds of development -- housing versus retail versus a school -- goes where. It also is to address how that development will in turn finance the $1.6 billion of public improvements contemplated for the new community, including such things as roads and parks.
At present, the money-making elements in the development are being asked to support all of that infrastructure, with the new housing expected to shoulder the lion's share. The $100 million that the environmentalists are contemplating in mitigation demands would be added to the infrastructure tab.
In her e-mail, Ms. Hippard notes that her group has met with Working Partnerships USA, a San Jose nonprofit and public policy group formed in 1995 to respond to the "widening gap between Silicon Valley's prosperous employers and the well-being of much of the region's workforce," according to Working Partnerships' web site.
Working Partnerships is led by Phaedra Ellis-Lamkins, the executive officer of the South Bay AFL-CIO Labor Council. Ms. Ellis-Lamkins is also on the task force.
In addition, Mr. Hippard says in the e-mail that she also has met recently with Terry Watt of the Silicon Valley Conservation Council "to discuss strategies for maximizing mitigation from the (Coyote Valley) project."
Ms. Watt is also a member of the task force.
Ms. Ellis-Lamkins, who confirmed that she met with Ms. Hippard outside the task force setting, denied that there is any conflict of interest or impropriety in her doing so, saying it is her responsibility to gather information from all interested parties in order to make a good decision about Coyote Valley.
"The labor movement has a relationship with the environmental community," she said. "We see them as a critical partner, and we advocated for them to have a seat on the task force."
However, she said, her organizations have made no "institutional commitments" to the Sierra Club and she said she does not believe it would be proper to do so.
Ms. Watt could not be reached for comment by deadline.
SHARON SIMONSON covers real estate for the Business Journal. Reach her at (408) 299-1853.
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