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Morgan Hill
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September 23, 2021

Trammell Crow project survives appeal

Developer demands recusal of council member

Trammell Crow’s proposed Redwood Tech at 101 project will proceed as planned after the Morgan Hill City Council rejected an appeal against the development’s design and tentative map.

The council voted 3-1 on June 23 to deny the appeal of Redwood Tech at 101 by the Morgan Hill Responsible Growth Coalition (MHRGC).

The council’s vote might have been closer, but Councilmember Gino Borgioli recused himself from the appeal hearing “due to the appearance of bias” that could have placed the city in danger of an expensive lawsuit, he said during the online meeting.

The Trammell Crow Company had previously challenged Borgioli’s ability to be impartial in the appeal hearing in a June 4 letter to the city attorney, citing past statements by Borgioli regarding the project proposed off Cochrane Road.

Councilmember Rene Spring dissented on the motion by Mayor Pro Tem John McKay to reject the appeal. Spring said he was concerned about the unclear wording of city planning ordinances that often don’t align with state law.

Redwood Tech at 101 is proposed on the east side of U.S. 101, off De Paul Drive in north Morgan Hill. The proposal consists of five industrial buildings that collectively total about 501,000 square feet on about 29 acres of property.

The zoning for the land is light industrial and Planned Development, according to a city staff report.

The Morgan Hill Planning Commission approved the project’s design permit and vesting tentative map on May 25, on a 6-1 vote. Subsequent appeals by two groups of residents led to the June 23 hearing before the council.

Plans submitted by Trammell Crow Company show the layout of the 501,000 square foot industrial development on a 29-acre property on De Paul Drive.

One of the appeals was withdrawn before the June 23 council hearing. Don Little, Senior Vice President of Trammell Crow Company, said the company reached a private settlement with the group. The terms of the settlement are not yet subject to public disclosure, Little said.

The MHRGC’s appeal was based on two complaints: the resolutions approving the design permit and parcel map were not consistent with the General Plan; and the city’s commission “could not make the necessary findings to approve a design permit or tentative map for the project based on information in the record,” says the appeal letter from Joe Baranowski of the MHRGC.

Morgan Hill City Attorney Don Larkin and Trammell Crow’s attorney refuted these claims during the June 23 public hearing, but Baranowski remains unconvinced.

“Residents should be appalled that city staff, without any public notice or input, have adopted a position brought forth by Trammell Crow that the plain language of our laws can, and must, be ignored and told both the Planning Commission and the City Council they have no discretionary role but instead are limited to considering the aesthetics of the proposed development,” Baranowski said in a June 29 email to the Times. “Effectively, when any project can be approved with a design permit, all environmental issues and the duty to protect public health and safety have been given to a few unelected, unappointed staff members.”

A key question regarding the MHRGC appeal centered on whether the city should further consider the potential environmental impacts of the Redwood Tech at 101 project before approving the design permit. Larkin and city staff argued that the Environmental Impact Report for the city’s General Plan 2035 update—completed in 2015—satisfied such requirements for the Trammell Crow property.

“We cannot force an EIR on an applicant if (the project) does not qualify for one,” added Morgan Hill Development Services Director Jennifer Carman.

The planning commission resolutions (upheld by the council) granting the Trammell Crow design permit and map impose a lengthy list of conditions on the project before construction can begin. These include a traffic impact analysis before each building is occupied; a wildlife habitat plan; a dust, noise, vibration and materials plan; lighting, landscaping, parking spaces, curbs and other infrastructure must be built to the city’s standards; and improvements to public roads and facilities bordering the property.

Little said with the council’s rejection of the appeal June 23, Trammell Crow could begin construction on the site by the beginning of 2022. Trammell Crow, a Texas-based developer, has not revealed who any of the Redwood Tech site’s tenants will be, but Little assured the MHRGC and public that it would not be a distribution or fulfillment center—chiefly because the council has prohibited such developments since December 2020.

Nearly 20 members of the public spoke during the June 23 hearing. Some commented that they still think Trammell Crow is trying to put in a distribution center that will bring heavy truck traffic.

“To those who keep bringing this up, please read the zoning ordinance,” Little said. “That is what the project will be, and we cannot go outside of that.”

The MHRGC since 2019 has advocated against distribution centers and certain large-scale industrial projects in the city limits. The group was formed shortly after the construction of the enormous new Shoe Palace building began on Jarvis Drive, and Trammell Crow’s purchase of 60 acres where Redwood Tech at 101 is now proposed.

Council members and Trammell Crow representatives have often criticized the group for its alleged refusal to negotiate. Some city officials have worried that MHRGC’s determination to affect local commercial projects might hurt Morgan Hill’s reputation as a business-friendly city.

“I find us at the same place with a special interest group that refuses to engage in conversation,” Little said of the MHRGC June 23.

Trammell Crow had previously proposed a project twice the size of Redwood Tech on the same site in 2019. However, Little noted that project was withdrawn and replaced with the smaller Redwood Tech proposal, largely due to public input.

Trammell Crow is also in the process of building the Butterfield Technology Park on Butterfield Boulevard. That project includes five separate commercial/industrial buildings ranging in size from 70,000 to 92,000 square feet.

The tension between MHRGC supporters and the development community has now invaded the council dais itself, as Borgioli’s past statements aligning himself with MHRGC have effectively removed him from the Trammell Crow decision making process.

Trammell Crow attorney David Blackwell, in a June 4 letter to Larkin, demanded that Borgioli recuse himself, citing numerous comments Borgioli has made against Trammell Crow and supporting MHRGC since he ran for his council seat in the 2020 election.

“He has repeatedly vowed to deny the project, has published disinformation regarding the project’s health risks, and has published videos attacking the project and Trammell Crow,” Blackwell’s letter states.

One of Borgioli’s statements cited by Blackwell was from an October 2020 article in the Morgan Hill Times, in which Borgioli, then a candidate for the council, said, “I will not let projects like Trammell Crow pass without voter support and I’m not going to vote for massive bond measures.”

After the June 23 meeting, Borgioli said he thinks there was nothing wrong with his past statements, and he may pursue legal action against Trammell Crow. He added at the June 23 meeting, “It’s a sad day that an elected official cannot express his or her opinion.”

Borgioli had also submitted a line-by-line response to Trammell Crow’s letter to Larkin.

Larkin said he brought in former Morgan Hill City Attorney Gary Baum to review Trammell Crow’s complaint against Borgioli. Baum advised Borgioli to recuse himself in order to shield the city from potential legal action by the developer.

“Do I feel that Trammell Crow is wrong? Yes, but I cannot put the city in legal jeopardy because it will take hundreds of thousands of dollars to fight this and we don’t have the funds to do that,” Borgioli said this week.

A rendering from Trammell Crow Company shows a portion of the design for the proposed Redwood Tech at 101 project. Photo: Trammell Crow Company

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