Contractors for electronics retail magnate John Fry can finally start pouring foundation concrete for the 170,000-square-foot American Institute of Mathematics headquarters, which will eventually serve, too, as the clubhouse for the PGA’s annual Frys.com Open tournament.
The construction site on Fry’s 192-acre Foothill Avenue property in southeast Morgan Hill has been tangled up in an “abundance of concern and caution” by City planners and PG&E, which owns a 34-inch natural gas transmission pipeline uphill from the AIM headquarters’ footprint, according to Fry’s Electronics and Frys.com spokesman Manuel Valerio.
It has also been the subject of “misunderstandings” and inadequate communication between City staff and the developer, according to Mayor Steve Tate.
AIM and Fry do not have a firm construction start date, but Valerio said they will likely start lining up contractors over the next few weeks.
“We can finally move forward with the permit, and we can finally move forward with construction,” Valerio said.
When complete, the AIM building will house staff and offices, and host events such as workshops and classes for the nonprofit think tank which was co-founded by Fry. The structure is proposed as a partial replica of the Spanish Alhambra castle which took more than 100 years to build.
It will also serve as the clubhouse and related facilities for the Frys.com Open professional golf tournament, which will be played on Fry’s challenging and lengthy 7,360-yard Institute Golf Course.
Getting the AIM permit issues resolved is an important part of eventually bringing the tournament back to South County.
The PGA tournament was held at CordeValle Golf Club in San Martin from 2010 through 2013. It traditionally attracts hundreds of visitors and has drawn big-name golfers like Tiger Woods, Ernie Els and Vijay Singh.
While in South County, area hotels, restaurants and public tax rolls benefited from the professional golfers and crowds visiting from all over the world, according to tournament officials and economic development people. Some have estimated the tournament pumps about $10 million to $15 million into the local economy annually.
This year’s tournament will be held in October at Silverado Resort and Spa in Napa, which has a one-year renewable agreement to host the Frys.com Open, according to Tournament Director Jeff Sanchez. CordeValle, a private resort facility, and the Frys.com Open did not renew their contract to host the tournament locally for 2014.
“It’s exciting to know there are signs of progress, knowing that the Institute is the ultimate destination for the Frys.com Open,” Sanchez said.
Frys.com will likely renew the contract with Silverado for 2015, and Valerio noted that Fry hopes to host the 2016 tournament at the Institute, but they will “know more once construction starts.”
“We’re going to focus on having a great couple of years at Silverado, but hopefully in a couple or three years we’ll be back in South County,” Valerio said.
Morgan Hill Chamber of Commerce President Rich Firato, who has volunteered at the tournament three out of the last four years, said local businesses will likely welcome the Frys.com Open’s return to South County.
“I think it will be fantastic for our restaurants, and our businesses and our night life,” Firato said. “With the way the community enjoys it and the notoriety it’s going to get for Morgan Hill, it’s fantastic and the Chamber would love to be a part of it.”
In recent months, the AIM developer has blamed the latest two-year-plus delay on PG&E, who was asked by City staff to examine the commingling of the AIM headquarters with a natural gas transmission pipeline the utility company owns on Fry’s property. The construction site is not touching the pipeline or PG&E’s easement, but is situated about 30 feet east.
PG&E sent Fry and City staff a list of recommendations to ensure the safety of the pipeline, and City staff continued to work with Fry to develop a “contingency plan” in the event of any significant seismic movement, according to City Manager Steve Rymer.
That plan includes modifications to the original foundation permit issued by the City in 2010, such as structural reinforcements, Rymer added. At 170,000 square feet, the proposed AIM structure is about 12 times the size of City Hall, which is about 14,000 square feet.
After a continued lack of response from PG&E, the City grabbed the reins and proceeded to wield its permitting authority, Valerio said.
“As I understand it, due to (PG&E) not really giving anybody any clear direction, it was basically a lot of hard work on the part of the City staff,” Valerio said. “They looked at all the safety features, all the information we had provided, and took into account all the things we have done and will do, with an abundance of caution. They took into account what (PG&E was) saying, and said this looks like it more than adequately meets safety standards.”
Valerio added there have been “some changes in administrative personnel” at City Hall since 2010.
Fry paid the City $300,000 in construction permit fees in 2010, plus another $50,000 in geotechnical consulting costs to determine the construction area – the site of an ancient landslide – was safe enough for the huge, castle-like structure.
Over the last few months, City staff – including City geologist Jim Baker – and Fry have been negotiating the recently added safety enhancements, Rymer added. The two parties struggled with “a different understanding of what is needed to move forward.”
“We got everything resolved that allows (AIM) to move forward, with the city taking the lead on permits,” Rymer said.
Tate added that the City and Fry still have “other permits to negotiate.”
The mayor and his wife have volunteered at the Frys.com Open in San Martin the last four years, and will continue to do so during the tournament’s two-year sojourn to the North Bay.
“I told them I would go up to Napa if they promised to come back to South County” once the AIM permit issues were resolved, Tate said.
The proposed headquarters for the American Institute of Mathematics will also serve as the clubhouse for the Institute Golf Course, located on John Fry’s southeast Morgan Hill 192-acre parcel. The structure is planned as a partial replica of the Spanish Alhambra castle. It is proposed to be 170,000 square feet.
