Residential development plans tied to
‘triggers’
If Coyote Valley is ever going to be home to 50,000 jobs and 80,000 residents, San Jose’s moribund economy needs to come to life.
Development plans for the area are tied to a set of prerequisite conditions, or “triggers,” based on the city’s financial health. Those conditions don’t exist, and likely won’t for several more years.
“Until things pick up or we reduce services we will probably have shortfalls for the foreseeable future,” San Jose’s Budget Director Larry Lisenbee said. “Until I see some indications that the job situation is improving, I will caution the city council that they should not expect any upswing in the Silicon Valley economy.”
At the end of the month, Lisenbee will release next year’s budget and five-year economic forecast for the city’s general fund and capital improvement programs. He expects it will mirror last year’s forecast of significant shortfalls in the immediate term and smaller but substantial deficits through 2010.
Lisenbee believes the economy has bottomed-out but said the region continues to lose jobs, posting negative numbers in that category in five of the last six months. And jobs are the key to developing Coyote Valley.
San Jose has had vague development plans for the region for decades. In 2001, based in part on a belief that Cisco Systems Inc. was about build a monumental campus in north Coyote, the city council approved Mayor Ron Gonzales’ recommendation to begin work on the Coyote Valley Specific Plan, and established the triggers for zoning changes to allow residential development in mid-Coyote.
The triggers are acknowledgment that Coyote Valley is not integral to the city’s immediate growth. Deputy Planner Laurel Prevetti said Thursday that the region won’t be the priority until the city exploits its other development opportunities.
“The triggers are historical and there because we felt we had a lot of capacity within existing areas, what we call in-fill development. We want to focus our growth downtown and along transit corridors,” she said. “The concept of Coyote Valley as an urban reserve meant we wouldn’t consider expanding the city until the triggers were in place.”
And the triggers are not in place.
The first is that 5,000 new jobs are added to north Coyote to complement the approximately 2,000 employees of IBM and Xlinx corporations there now.
At one time, Cisco envisioned building a 6.6-million, square-foot office complex that would be home to as many as 20,000 employees. That plan went the way of the economy. Now if Cisco builds at all, its space won’t exceed 500,000 square feet, according to a Cisco spokeswoman.
Although the specific plan calls for an “iconic” corporate presence near Bailey Avenue, the city hasn’t lined up any replacements. Its most hopeful estimate for attracting 5,000 new jobs to the area is 2012. Prevetti said that the city’s best strategy is to appeal to a mix of users, taking advantage of a proliferation of smaller businesses.
“We have a lot of smaller companies that don’t have a need to invest in a huge campus,” Prevetti said. “What we’re really facing is that we have a lot of existing vacant office space, and most builders will go there if it meets their needs. But if there are companies that want to make a statement, and have enough cash to build a monument building, they’re more likely to be interested in Coyote Valley in the short term.”
The specific plan has advanced rapidly. The city is about to begin work on an environmental impact report and is huddling with property owners and economic advisors to put together a a phasing schedule for infrastructure work that has been priced at $1.5 billion.
Planners say they will not move forward with any development that is not self-sufficient. To date, all the expenses of the planning process have been covered by the Coyote Housing Group, an association of homebuilders. The city has promises from property owners and developers to cover the infrastructure costs, which include bringing water and sewage services to mid-Coyote. It’s likely the city will establish a special assessment district to fund development.
But the earliest cost estimates for Coyote Valley don’t include such essentials as police and fire services, and according to the city’s general plan, residential developers can not start building until the city is in good economic health.
That means a five-year forecast of balanced or surplus budgets, a predictable financial relationship with the state and other levels of government, and city services that are at least at the same level they were in 1993.
There is a caveat: The city council can change the triggers if it believes Coyote Valley services are self-sustaining and won’t drain the city’s general fund.
Lisenbee said that figuring out the incremental costs of Coyote Valley will be guesswork because most city services are not tracked geographically.
“Incremental costs will be a series of estimates that are not based on anything precise because we don’t measure things that way,” he said, adding that the city will be in even worse financial condition if the real estate market cools.
Prevetti and Kerry Williams, president of the Coyote Housing Group, agree that the biggest challenge ahead is determining how and when to phase in development.
“It’s very complicated to figure out how many jobs and how much housing in each phase,” Williams said. “There’s a gazillion details that need to be worked out about that. We need everyone out there to participate in the assessment district to finance these costs. The costs are challenging, but they’re not insurmountable.”
Prevetti said it won’t be a problem attracting business without additional housing because north Coyote is close to housing in the Santa Teresa and Silver Creek neighborhoods.
“There are a lot of planned and existed developments that can serve North Coyote and have the benefit of easing traffic congestion,” she said. “What we’re doing is planning for the entire area so we’ll have a comprehensive plan for integrating housing, jobs, recreation, et cetera.”
Gilroy Dispatch reporter Matt King covers Santa Clara County. He can be reached at mk***@gi************.com or 847-7240.
