There aren
’t many cattle grazing their way across the old Hayes Valley
Ranch anymore.
There aren’t many cattle grazing their way across the old Hayes Valley Ranch anymore. The hillsides in west San Martin are still lush and green in the spring, but the land is now natural habitat for country homes and retirement estates. There’s even a castle under construction.
That isn’t what proponents of the Williamson Act had in mind when the law was passed in 1965, so it might seem odd that most of the properties there receive the law’s generous tax break that was intended to protect farmland and open space from development. But the properties are typical of the 3,000 Williamson parcels in Santa Clara County.
About a third of those parcels don’t comply with the law. They’re either too small to support productive agriculture – the act requires at least 10 acres of land, and in most cases 40 – or simply don’t support agriculture at all. And the penalties for canceling a contract aren’t always enough to scare away developers. So is the act doing its job?
“I think that Williamson in general has worked very well,” said Assemblyman John Laird, D-Santa Cruz. “It needs some fine tuning. It’s always hard when you have one law that’s supposed to apply to all 58 counties.”
Laird is the author of AB 1492, a 2003 bill that more than doubled Williamson’s cancellation fees. He said Santa Clara County didn’t inspire AB 1492 – it was a department store built on ag land in Tracy did that – but Santa Clara is unique in its problems because more than any other county, it is struggling to mix rapid urbanization with agriculture. Some have suggested that the act be amended so the contract could be automatically terminated when a property is sold. Laird said that would only make matters worse.
“I believe the current situation works,” he said. “If you end the rolling, 10-year contract, the benefit tips entirely toward the land owner and away from the public interest of preserving agriculture and open space.”
Most of the county’s Williamson contracts were signed in the late 1960s and early 1970s. By 1980, the majority of land covered by the contracts had been subdivided, often against the spirit of the law, but mostly into parcels that were larger than the 2.5-acre home sites then allowed by the county’s general plan.
Interim Planning Director Mike Lopez, who’s been in the Santa Clara County Office of Planning for 30 years, said recently that subdividing under Williamson looked at the time to be the best way to protect open space.
“There was a good feeling about the Williamson Act and the opportunity to save some agriculture property so the county was issuing contracts whenever it appeared appropriate,” Lopez said. “I don’t know how much thought was given to subdivisions. It wouldn’t have been something that was consciously violated.”
But reviewing the contracts, it’s clear that many land owners intended from the start to subdivide the land and sell them as home sites.
Carol Hayes, who’s now deceased, signed his Williamson contract in 1975. The land was soon purchased by a group of Morgan Hill developers led by Alvin J. Hoffman, also deceased. By the early 1980s, 870 acres had been divided into more than 40 parcels of about 20 acres each. Over the life of the contract, which attaches to the land, those parcels have changed hands more than 120 times. Agriculture has all but disappeared from the land now known as the San Martin Estates.
Sig Sanchez, a county supervisor at the time of those subdivisions, said he thought the split was legitimate under the rules. But the neighborhood highlights how the county’s general plan, which now mandates 20-acre lots for hillside development, has eliminated many claims on the Williamson Act’s tax break. Essentially, people who live on hillsides and don’t farm are receiving a tax break for not developing land that county law already prohibits from most development.
And in Gilroy, the act’s restrictions – and the decade wait to get out of the contract with no penalty – haven’t prevented investors from speculating on land north of town that may be annexed to the city. Hayward’s Church of God in Christ owns 21 acres on Rucker Avenue where it hopes to one day construct a church and homes. An 18-acre lot between Kern and Wren avenues at Farrell Avenue is being held by Wren Investors LLC, which placed a $2.7 million bet in 2000 that it could one day build potentially hundreds of homes on the property.
Skip Spiering, one of the lead investors on that project, said his group tried to cancel the Williamson contract, which would have cost about another $400,000, but the county didn’t approve the transaction.
So Wren non-renewed, meaning the land will be free of the act’s development restrictions in 2009, right about the time Gilroy is ready to annex the property. Meanwhile the investors are saving about $34,000 a year in taxes and are not farming the land, which is required even after non-renewal.
Sanchez said those tax breaks may be undeserved, but the lands aren’t losses to the county’s agrarian past. Hillsides can’t be farmed productively, and the soil north of Gilroy won’t support profitable orchards or row crops.
“I think the Williamson Act has protected true agriculture. The Williamson Act originally envisioned saving prime, productive agricultural land,” Sanchez said. “The act was intended to protect open space but how are you going to develop on the hillside? From a production standpoint it doesn’t make any sense. You build a home on one acre and what are you going to do with the other 19? Grow weeds?”
