Last night, Los Gatos Town Council greenlit Phase 2 of the North 40 mixed-use project, from Grosvenor Americas, which features 450 units of housing, including 77 affordable units—16 of which will be reserved for residents with intellectual and developmental disabilities.
The approval, which allows the reshaping of one of the last remaining orchards in this stretch of Silicon Valley into a tech-modernist built environment, was a split 3-2 decision, as, after several hours of discussion during a special meeting, former mayors Mary Badame and Matthew Hudes voted against.
“This was a difficult decision, and one that I take very seriously,” Mayor Rob Moore said in a text interview after the pivotal meeting for the future of the town. “Reasonable people can—and do—disagree about this project. I respect those disagreements, and I do not view tonight’s decision as a reflection of anyone’s commitment to Los Gatos or lack thereof.”
Many locals are worried new developments—or at least poorly planned ones—could hurt their property values, or reduce their quality of living.
But the community is in the midst of an eight-year cycle where it’s required to try to produce at least 1,993 homes, to catch up for the years where it discouraged development. So, some residents were hoping to see even more housing on this site, to avoid having to invite affordable and multi-family projects into single-family housing zones.
The homes supply problem got so bad that Sacramento had to step in and pass a bunch of new laws to force places like Los Gatos to allow housing their planners didn’t necessarily want. This has caused headaches for a variety of wealthy communities up and down the coast, like Huntington Beach, Beverly Hills, Redondo Beach and La Cañada Flintridge—among others—which have all tried to push back against the Department of Housing and Community Development in one way or another.
Los Gatos is currently involved in multiple lawsuits, where it is opposing certain key aspects of the State’s push to create places to live for people of all income levels in a variety of highly desirable locales.
Per one of the new rules, Los Gatos had to deal with the North 40 Phase 2 project within five Town meetings—or else it gets approved automatically. Staff confirmed that the special Council meeting was the third. So, while there was a countdown underway, there was still time for more thorough review (though Eden Housing, the affordable housing developer involved in the project, tried to add a sense of urgency by saying they could miss important funding deadlines if the project wasn’t OK’d promptly).
When it came to one of the most powerful tools established by the State of California—the Builder’s Remedy punishment—Los Gatos didn’t take it seriously enough, and is now suffering the consequences.
Because Los Gatos failed to adopt a compliant Housing Element by the deadline, developers that submitted projects afterwards were allowed to request special concessions—and propose bigger projects.
Locked and loaded, Grosvenor pulled the trigger and turned in its North 40 Phase 2 plans.
This put them in a strong position. While they didn’t end up using the Builder’s Remedy, the threat loomed heavy over the hearing. Because—as the Town Attorney confirmed—if Los Gatos denied the current Phase 2 project, Grosvenor could assert their “Builder’s Remedy” rights at that point, and return with a much larger (and more profitable) development.
However, the applicant did end up invoking the State’s density bonus law. Because 17% of the project included affordable units for lower income residents, this entitled them to two incentives or concessions. The first request was to eliminate the requirement for commercial on the ground floor of the townhomes and affordable multi-family apartment building.
The second was to be able to build the market rate townhomes first—to cover the around $100 million of upfront costs—before having to build any affordable housing. The Town revealed that it got a second opinion and learned that the developer would be just barely in the black after selling all the townhomes. The affordable housing developer working on the standalone affordable housing building said having the infrastructure in place ahead of time would help with securing funding.
But this was a significant point of concern, as many locals say they were led to believe there’d be more affordable housing constructed as part of Phase 1 than ended up being built. (And Los Gatos received last-minute communication from HCD about the issue, which residents used as fodder for requesting the meeting be put off into the future.)
Vice Mayor Ristow said Phase 1 was hampered by arbitrary height limits (of 45 feet in on section, and 35 in another), which constrained that project and caused the developer to lean toward a prominent boxy design that many Los Gatos citizens detest.
After everyone else began to run out of steam and seemed to be awaiting a final motion, Councilmember Hudes kept chugging along with additional questions for staff.
At one point he made a motion for a continuance and read a laundry list of reasons why he believes the current project is inadequate. This included his complaint that the Town Attorney had not put every single recent email with the Department of Housing and Community Development in the agenda packet.
This was defeated 3-2, with his frequent voting companion Badame the lone Council member to join him.
Councilmember Rob Rennie, often the swing vote, made it clear he wasn’t interested in being part of any stalling efforts. He said he thought Hudes was looking for excuses to not support Phase 2.
Hudes said the Town was not operating in a transparent manner.
But Councilmember Rob Rennie said he was getting fed up with Hudes’ rhetoric, arguing that continuing the matter so Council could have another kick at the can in closed session would be the real lack-of-transparency example.
Rennie said it’s better that people have the chance to see how the local politics “sausage” is made in full view of the people.
Hudes also argued that the 100-foot building be pushed back further from Los Gatos Boulevard. But Vice Mayor Maria Ristow said residents would probably hate it even more if the high-rise was placed along the highway, or if it took away some of the public open space.
Despite the strong opinions, the disagreements were primarily expressed in monotone, and even via lighthearted banter. For example, when Councilmember Badame accidentally voted against the continuance motion—something the mayor knew was totally contrary to her intention—Moore offered her the opportunity to change her vote, which she promptly did, creating a moment of levity.
However, in one surprisingly tense exchange, Town Manager Chris Constantin rebuked Maria Ristow, stating she cut him off when he was sharing his thoughts about how to put in place a mechanism to ensure the affordable housing actually gets built.
A couple hours after the decision (with the entitlements finally “in the bag”) Don Capobres, principal with Harmonie Park Development Company—one of the firms behind the North 40 project—took to social media to lash out at Hudes and Badame.
“The 2 no votes should be investigated,” he commented on LinkedIn.
Then, he moved over to Instagram, where he was not at all subtle in his remarks on the Los Gatan’s sit-down interview video with Hudes, who was mayor at the time.
“Do you honestly think you are defending the Town against exposure to future Builder’s Remedy projects by your actions on Council?” he asked. “Total malfeasance.”
