North 40 Phase 2
Grosvenor - Property Americas has submitted its official plan for Phase 2 of the North 40 mixed-used project, located near the border of Campbell and San Jose. (Grosvenor - Property Americas)

It’s the development in Los Gatos that has become a symbol of how the town is changing, on which locals have frequently placed their often quite charged feelings about the “character” of the community and what should be done about the housing crisis.

And on Friday, Grosvenor – Property Americas submitted its official plan for Phase 2 of the North 40 mixed-used project, located at—and around—14859 Los Gatos Blvd., near the border with Campbell and San Jose.

“We’re just really excited,” said Steve Buster, a Grosvenor senior vice president, in an interview. “We are very proud to be proposing the first multi-family rental building of any scale in years.”

In the last Housing Element cycle, the Town approved the North 40 Phase 1 development, which included 49 very-low income senior housing units and one moderate-income manager unit.

The North 40 Specific Plan designated Phase 2 for 461 units at a minimum density of 30 dwelling units per acre—which is in addition to neighboring properties being developed separately.

Los Gatos’ Sites Inventory, in the latest Housing Element draft, notes the overall number for North 40 Phase 2 has been revised downwards by nine units.

However, the plan has actually been revised upwards from the preapplication stage, when the company said it wanted to construct 437 total units, including 348 market rate units and 88 “low income” units, as well as 730 total parking spaces.

In the official application, Grosvenor now says it wants to build 451 new rental apartments and for-sale or rental townhomes, with 20% available to people of lower incomes (91 units), on land currently owned by Yuki Family Farms General Partnership.

This includes “67 affordable rental homes available to low and very low-income households (in addition to one unit reserved for a manager) on approximately 1.5 acres that will be donated to an affordable housing developer,” the developer states in the project description. “The new homes are complemented by various resident amenities and community-serving ground floor commercial spaces.”

These new buildings are to be arranged around a central public open space—called “The Meadow”—which will be visible from Los Gatos Boulevard.

“The Project includes all necessary access, circulation, streetscape, and landscaping to complement and service the new buildings and to complete relevant sections of the bicycle and pedestrian routes,” the summary states. “On-site streets will be connected to existing Phase I streets to complete the internal circulation system as anticipated in the North 40 Specific Plan.”

But, in its Affordably Furthering Fair Housing report for the State, while the Town points to a total site capacity at the North 40 Phase 2 of 452 units, this is broken down into 184 very low, 89 low, 92 moderate and 87 above moderate units.

North 40 phase 2 design
(Grosvenor – Property Americas)

According to the California Department of Housing and Community Development, this part of the document is about promoting inclusive communities free from barriers that restrict access to opportunities based on protected characteristics.

Critics contend Los Gatos hasn’t done enough to maximize affordable housing, saying the North 40 Phase 2 is an example of how the municipality is failing to encourage the building of adequate housing for lower-income people.

The developer has been warning the Town for quite some time that, while their team is working to include a chunk of affordable homes, it won’t be able to incorporate as many as the Town would like to see.

In the Housing Element draft posted for public review Sept. 22, the Los Gatos officials added a bit more detail about development trends the community is facing.

“The Town has experienced a high demand for residential projects given recent legislation aimed at creating housing in a more streamlined process,” reads the document, which references 401-409 Alberto Way, a site approved for an office building, in an earlier incarnation. “Based on the discussions regarding the Housing Element and recent State housing legislation, the property owner has chosen to pursue a multi-family housing project.”

It also points to the “office”-zoned site at 375 Knowles Ave. and a “neighborhood commercial”-zoned 258 Union Ave. as examples of where homes were approved in business zones.

Buster says Phase 2 of the North 40 will include 255 multi-family rental units (23 of which are to be affordable for people making up to 80% of area median income) and 128 townhomes.

“We’re going to see if we can salvage the red barn that’s been historically located on the site for years,” he said. “We’re very aligned with the Town on providing affordable housing.”

Once the project wins approval, Grosvenor plans to purchase the relevant parcels from the Yuki family and donate the designated land to Eden Housing, for their 68-unit affordable housing project, he added.

“We would never be able to compete for any of these acres,” said Linda Mandolini, president and CEO of Eden Housing. “It’s a really valuable donation for us.”

Mandolini said the Walnut Grove senior homes in the first phase proved just how much demand there is for affordable units in Los Gatos.

“We know the need is there,” she said, adding this time they’re looking to build housing for families—which may include seniors. “For us this is really an awesome opportunity that doesn’t come along every day.”

Not everyone is thrilled with the proposal. Mention the project to many locals and you’ll find yourself stirring a pot of visceral emotions.

Grosvenor - Property Americas designs
(Grosvenor – Property Americas)

Take 82-year-old Paul Grabeel, for example. While he lives just over the mountain ridge in Santa Cruz County, his wife grew up in Los Gatos and over the years he worked for major Silicon Valley-focused firms like Swenson Builders and Devcon Construction, and for Los Gatos-based architect Frank W. Laulainen.

“Oh God, that looks like a hospital,” he said upon viewing one of the buildings in the latest renderings. “It’s criminal what they’re doing.”

To put his critique in perspective, he shared a story about a time he pitched a wrought iron gate for a restaurant near the Los Gatos Theatre.

“I designed this Art Nouveau gate,” he said. “The Town of Los Gatos rejected it because it didn’t look like anything up and down the street.”

He says something much blander was approved, instead.

The North 40 site could’ve generated something better, had the Town been willing to support something he views as in-line with the character of the community much earlier, he argued.

“If you wanted to create a ‘Los Gatos feel,’ that’s what you would create,” he said. “And it could be done. Because there are big builders and developers involved, they can’t do it that way. They can’t think that way…Functionally they can only operate at one scale, and that’s a massive scale. And massive scale means repetition. It doesn’t mean diversity at all.”

He thinks if Los Gatos was serious about helping solve the affordability crisis it would’ve designated the site for a 100% affordable project.

When questioned about the form of the tech modernist structures Grosvenor has in mind for Phase 2, Buster disagreed with any characterization of the architecture as boring or out of step with Los Gatos.

“Once you see the application,” he replied, “I think you’ll be pleasantly surprised with the design.”

North 40 Phase 2
(Grosvenor – Property Americas)

According to Buster, they did try to make the buildings more interesting wherever possible.

“We, as developers, try to push it every way we can,” he said, but added, “You have to balance that with providing affordable housing, providing open space—in this case eight acres throughout the site—and delivering a financially feasible project.”

Speaking next on the Zoom call, Mandolini added that from Eden Housing’s point of view, affordable housing structures actually shouldn’t be too dramatic.

“We don’t want to be the building that people point out,” she said. “The renderings are really quite nice.”

When pressed on why project plans describe housing for “low and very low-income” households, when the project doesn’t include any “very low income” units, Mandolini said Eden Housing accesses subsidies from the State that help get poorer people into homes they otherwise wouldn’t be able to afford.

“It’s kind of this really complicated puzzle for us,” she said, stressing the importance of having rental units available in the local real estate market. “Not everyone can afford to buy.”

The Housing Element Advisory Board will hold a special meeting Sept. 28 at 7pm to review and discuss the Town’s Draft Revised Housing Element addressing the California Department of Housing and Community Development’s comment letter received May 30.

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Drew Penner is an award-winning Canadian journalist whose reporting has appeared in the Globe and Mail, Good Times Santa Cruz, Los Angeles Times, Scotts Valley Press Banner, San Diego Union-Tribune, KCRW and the Vancouver Sun. Please send your Los Gatos and Santa Cruz County news tips to [email protected].


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