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San Jose Inside: Investors Eye San Jose Hillsides for Luxury Subdivision

This article was originally published on April 9, 2014 by San Jose Inside.

By Jennifer Wadsworth

From his stone-colonnade balcony, Don Herd sees how San Jose used to look before strip malls and tract homes gobbled up 175 square miles of ridgelines and valley. Cows and Tule elk, green hills and scattered oaks.

The aging temp agency CEO built his hilltop home in 1999 on the city’s southeastern edge amongst a cluster of multimillion-dollar customs marked by Grecian balustrades, marble lions and flanked by manicured palm trees. It’s the kind of development voters and contemporary policymakers want to avoid, a relic of the Dot Com boom’s indulgent opulence and the single-family housing explosion that turned Silicon Valley into a pell-mell of hillside-breaching sprawl. But foreign investors are eyeing the nearby hills for another upscale neighborhood, albeit one that’s less dense and with larger units.

“We could lose this,” Herd says, pointing to the stretch of rangeland between Silver Creek Valley and Metcalfe roads. “This could get replaced with a construction site. After we built our homes here, we decided—the voters decided—that this was it. This is the urban growth line.”

The calm, bucolic setting belies the pitched battle over its future. Hong Kong-based millionaires who own the land want to turn it into a 79-home luxury subdivision, called Young Ranch, with a community center and a nature preserve. But conservationists argue that the 2,150 acres pegged for development lie just beyond a voter-approved boundary called the greenline, which prohibits urban growth. By Tuesday, an online petition opposing the project garnered 560 signatures.

“We want to make sure that the right development happens in the right place,” says Michele Beasley, a regional director at nonprofit Greenbelt Alliance. “This is not the right development nor the right place. It would bring urban services to a rural area.” [emphasis added]

Beasley and others say the property owners seem out of touch with what the community wants for its remaining countryside, an ecologically sensitive expanse of serpentine grassland, ponds, creeks and intermittent streams.

“This land, the way it is, actually contributes to our quality of life,” she says. “When you have protected hillsides, that’s our watershed land, that’s the land that filters our drinking water.” [emphasis added]

The landholding company YCS Investments, short for the family name Yeung Chi Shing, bought up the land in the 1970s. They waited decades before filing initial permits for the $90 million project with Santa Clara County four years ago.

“There were other plans and efforts for the property that came up over the years, but none of them were successful or got past very early stages of planning,” says Wayne Costa, a senior project manager for YCS Investments. “The current effort started to take shape in 2010 after the economy started emerging from the Great Recession.”

But while the owners held off development for nearly 40 years, the region underwent a culture change in the way it approaches urban planning. Runaway growth led to congested roadways and the backlash prompted voters and policymakers to favor infill over spread-out construction. Measure K, which established the greenline just beyond Herd’s home in 2000, passed with 81 percent of the vote. The latest iteration of the city’s General Plan—its blueprint for future expansion—calls for denser housing within walking distance to jobs and public transit.

“This just isn’t the type of development we want anymore,” says Julie Hutcheson, an advocate for Committee for Green Foothills, another group protesting Young Ranch. “It depends on which side of the fence you’re standing. County staff reportedly believes they have a viable project here. Whereas the city of San Jose thinks, hey, this doesn’t match up to what we have in our general plan. There’s a conflict of jurisdictions.”

Meanwhile, the region formed what became the Habitat Conservation Plan, a public-private permitting framework that promises to protect 60 percent of the county’s remaining wild land, raise $658 million for conservation and protect 18 endangered and threatened species. Under the new guidelines, YCS Investments would have to dedicate 90 percent of the land as a nature preserve. The company turned that into a marketing opportunity, revamping their website to include photos of rolling hills, roaming cattle and butterflies and boasting of its stewardship of the land.

“Through our habitat plan work we began to realize the contribution we could make and saw an opportunity to be one of the first private proposals that could be a model for private rural development that facilitates the creation of the Habitat Plan’s reserve system,” says Costa, whose original proposal included 87 homes and a community center.

The application up for review by county planning commissioners would build Young Ranch in two phases: 39 homes at first, the rest following later approval. It would need San Jose to relinquish two-thirds of the parcel to the county. The homes would lie on two-acre plots in the northernmost 200 acres of the property and be held to strict landscaping rules to maintain a rural feel. No lots would be flattened, no sidewalks paved and no boundary fences erected. Homeowners would rely on septic tanks and water would come from either wells or the privately owned Edenvale/Great Oaks Water Service. A 3-mile-long access road to the development would branch off from Silver Creek Valley.

“It comes down to how you define rural,” says Herd, who grew up in Kansas before striking it rich in California. “Where I’m from you have one house per 10 acres or more. That’s real rural.”

A neighborhood the size of Young Ranch would strain public services and infrastructure, says John Baty, a senior planner for the city of San Jose. It would likely depend on the city for fire protection, police services and add traffic to existing roadways. San Jose planning commissioners would also have to agree to annex two-thirds of the property from city jurisdiction to the county to proceed with development, giving up revenue from construction fees.

“This is, by far, the county’s biggest housing proposal in years,” Beasley says. “We just don’t see this type of project anymore. It’s pretty well documented that we have overbuilt the single-family home market.” [emphasis added]

On April 24, the county Planning Commission will hold a fourth hearing on the matter to discuss whether the application complies with the general plan’s vision for unincorporated development. Costa insists that it does.

“A lot of people are under the impression that if you’re outside the urban growth boundary, that means zero development,” he says. “Right now, they’re seeing rolling green hills with cows grazing and they think that it’s public open space. It’s not. It’s private land where we’re allowed to have what we call rural-residential development up to a certain density.”

Costa says environmental groups seem to disregard the fact that his company has managed the land responsibly and wants to protect the vast majority of it.

“We’re not just trying to build a run-of-the-mill development,” he says. “We’re trying to create a conservation community. The first step to that is to know your property. We studied the land—we studied its resources and habitat—and then designed the development portion of it as sensitively as possible.”

Beasley dramatically likens Costa’s approach to a hostage situation.

“It’s as if they have a gun to our head,” she says. “They want to do a trade-off to hand over this land to habitat conservation in exchange for development approval. But this shouldn’t be a trade-off. We have to look at whether this fits the spirit and intent of the growth boundary.” [emphasis added]

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