Landowners sue S.J. over Coyote Valley
City's moves to protect scenic landscape stand in the way of three families selling the property
More than 50 years ago, three San Jose families bought vast acres of open land in North Coyote Valley with the expectation of one day selling the properties to a developer and turning a major profit.
But a recent move by the city to protect the scenic landscape on San Jose's southern edge from becoming a sprawling industrial park has dashed their dreams. And now they're taking the city to court.
In a federal lawsuit filed this week in the Northern District of California, the Benson, Foster and Lester families who own 126.5 acres of undeveloped land in the North Coyote Valley argue that a series of land-use changes by the city to indefinitely preserve the bulk of North and Mid-Coyote Valley as open space and farmland amounts to an unlawful taking of their land for public use.
The property owners now are asking a judge to demand that the city buy the properties — located just south of Bailey Avenue between Monterey Road and Santa Teresa Boulevard — for a fair-market value.
“It's really a basic question of fairness,” said Edward Burg, a Los Angeles-based attorney representing the property owners. “We're not saying that there's anything wrong with the city's desire to preserve Coyote Valley. What's wrong is spending $96 million to buy properties right across the street and refusing to buy my clients' properties when the goal is exactly the same.”
The lawsuit specifically takes aim at the inconsistent approaches San Jose has taken to preserve Coyote Valley.
In November 2019, the city of San Jose partnered with environmental
groups to execute a historic $96 million deal to buy 937 acres in Coyote Valley from leading Silicon Valley developers Brandenburg Properties and the Sobrato Organization. As part of the deal, San Jose agreed to fork over $46 million while the Peninsula Open Space Trust, a nonprofit group based in Palo Alto, paid $42 million and the Santa Clara Valley Open Space Authority contributed $5 million.
Then, exactly two years later, the San Jose City Council on Nov. 16, approved a series of amendments to the city's general plan aimed at further preserving Coyote Valley for open space and farmland. As part of that vote, the city rezoned 314 acres of remaining undeveloped land in North Coyote Valley, which included land owned by the property owners who are suing, from an industrial park designation to agricultural.
In both instances, city leaders wanted to achieve the same goal: preserving the rural expanse of farmland and open space on the
southern edge of San Jose.
So the notion that the city would pay one set of property owners millions to achieve its goal while leaving others emptyhanded “unfairly discriminates” against the property owners who the city failed to compensate, the lawsuit argues.
“Our ask is that the city acts fairly and treat my clients' properties the same as the Brandenburg and Sobrato properties,” Burg said.
City Attorney Nora Frimann declined to comment on the matter, citing the pending litigation.
San Jose Mayor Sam Liccardo previously told this news organization that there “simply was no pot of money that the city has to pay everyone what they think their land is worth.”
“That is not the way it works with land use in this city or any other cities,” he said after the November vote. “We make land use decisions all the time that diminish the value of land and we do so within the law and within the constitution.”
In January 2020, the families who are suing the city entered a contract to sell their land for more than $44 million to Texas-based real estate developer Crow Holdings Industrial.
Under a preliminary plan submitted to the city, Crow Holdings Industrial has proposed building two warehouses that were designed to span the length of more than six football fields. The project, which would have been located at 8820 Santa Teresa Boulevard, was expected to replace 126 acres of mostly vacant farmland, as well as Spina Farms Pumpkin Patch and fruit stand — a beloved South Bay destination for families, cyclists and visitors.
That plan, however, tanked late last year after the consequential vote by the San Jose City Council in November.
Within days of the rezoning of their properties, Crow Holdings Industrial terminated its contract with the property owners, squashing hopes of their anticipated multimillion-dollar payout, according to the suit. In addition, the new land use designation precludes their properties for seasonal pumpkin patch uses because such seasonal uses are not permitted under the new agricultural zoning, the lawsuit states.
The property owners and their attorneys argue that using the land for farming is no longer economically feasible, leaving the property owners with minimal options to make use of their land now. They are requesting a trial before a jury.
Megan Fluke, executive director of the environmental organization Green Foothills, said that the landowners were “grasping at straws.”
“This is an expensive distraction they are inflicting on the public,” Fluke said in a statement Friday. “The City Council vote was the culmination of many years of work, millions of dollars of public and private investment, and overwhelming community support.”
Development battles coming out of Coyote Valley have been waged for more than six decades.
Although city officials currently are focused on preserving the valley's undeveloped land, that wasn't always the case.
For decades, the Coyote Valley was seen as a promising area of the city for thousands of new jobs and homes. In the early 2000s, the city's plan for the area envisioned the development of more than 50,000 new jobs and up to 25,000 new homes in the valley.
But over the years, environmental advocates have lobbied for city officials to concentrate development in the urban core and instead use the undeveloped land in the valley to support small farmers and provide recreational opportunities for the community.
The valley, which encompasses a total of 7,400 acres, is celebrated by environmentalists for its vital natural functions, including reducing flood risks, maintaining good water quality and supporting wildlife. It's the last remaining open valley floor in the Bay Area for wildlife to migrate between the Santa Cruz Mountains and the Diablo Range.