Owner says its not a problem; others question development
Gilroy – Local officials and Amah Mutsun tribal leaders are questioning the development prospects for Sargent Ranch after a Gilroy Dispatch investigation revealed that the owner, Wayne Pierce, has leveraged the 6,500-acre South Valley land for at least $35.5 million.
The investigation of Santa Clara County land records showed that Pierce, a developer and mortgage banker, repeatedly used the ranch as collateral to borrow millions in the last seven years. He has declined to specify how he used the money.
County zoning prohibits the scale of development Pierce has proposed in the past. An application in 2000 included plans for two golf courses and hundreds of hillside homes on the property, located west of Highway 101 south of Gilroy and just north of the San Benito County border.
“If he built two golf courses and he built the 200 homes, he’d never pay off that kind of debt because the infrastructure would cost him a fortune,” said Santa Clara County Supervisor Don Gage, whose district includes Sargent Ranch. “He’s got to have a sewage plant. He’s got to build all the roads. He’s got to mitigate all the hazards. If you look at Coyote Valley (a proposed 50,000-home development north of Morgan Hill), that’s two square miles and the infrastructure is $1.5 billion.”
Pierce countered via e-mail that “the debt level on our ranch is in line with its actual and future value of similar properties in Northern California. … A review of recent sales and listings of similar home sites in the county will confirm that the debt on the ranch is actually low.”
Since withdrawing his application to amend county zoning, Pierce has teamed up with Irenne Zwierlein, one of two rival leaders within the split Amah Mutsun tribe, on a multi-million land deal.
Under the agreement outlined in Zwierlein’s economic development plan, Pierce will provide the Amah Mutsun with $21 million for a cultural center and 3,500 acres of Sargent Ranch, the tribe’s ancestral lands. In exchange, the tribe will lease back 3,000 acres to Pierce, allowing him to develop the property. The entire deal hinges on the tribe gaining federal recognition and placing the land in trust, under the governance of tribal law.
To date, Pierce has spent hundreds of thousands of dollars helping the tribe negotiate the recognition process. Those efforts include lobbying congressmen to sponsor legislative recognition of the tribe. Otherwise, the tribe faces a 10- to 20-year review process at the hands of regulators at the federal Bureau of Indian Affairs.
Legislative recognition is unlikely for the moment, as no local congressional members appear willing to take on the controversial issue.
“We don’t have any plans at this time to introduce legislation,” said Jay Staunton, spokesman for Congressman Mike Honda. U.S. Representatives Sam Farr and Zoe Lofgren, whose districts border the Sargent Ranch property, have also said they would not sponsor such a bill.
“I’m sure he’ll find somebody,” Gage said of Pierce. “But it’s sure going to be a long road. You gotta pay a lot of money to get that done.”
Pierce said his primary goal is helping the tribe gain recognition. He said he no longer wishes to build golf courses and homes, but instead hopes to construct senior housing or congregate care facilities.
Pierce and Zwierlein contend that current zoning would allow the development of hundreds of homes on Sargent Ranch, regardless of the tribe’s cooperation.
County planner Bill Shoe said, however, that current zoning and various environmental constraints would limit the number of homes to 150. Further, the area’s current designation as agricultural ranchlands would only permit the construction of a handful of houses every few years – hardly enough to sustain the millions in debt and interest payments associated with the ranch, according to Gage.
The situation has left some fearing that only a casino proposal or a project of similar scale could generate the revenue needed to pay off the debt.
Pierce has repeatedly stated that he has no interest in pursuing a casino, and Zwierlein has banned gaming as part of a new tribal constitution, written after her March 2000 resignation from the original tribal council.
Val Lopez, the leader of the opposing council, acknowledged that “their current constitution says ‘no casino.’ However, what is to say that as soon as the land goes into trust, that they don’t vote Irenne (Zwierlein) out and vote to go to a casino. By saying that ‘no casino’ is in the constitution, that really doesn’t mean anything.”
Quirina Luna-Costillas, another member of the Lopez faction who heads the tribe’s language foundation, was surprised to learn about the Sargent Ranch debt. She questioned the wisdom of Pierce’s investment.
“Nobody’s ever going to allow that land to be developed,” Luna-Costillas said. “It doesn’t matter whether it’s the Indians, the county or the environmental groups. It’s worthless land to anybody but us. It’s part of our culture.”
Gilroy Dispatch reporter Serdar Tumgoren can be reached at [email protected] or 847-7109.
