TDR could be useful tool for future LASD land purchases

A new acronym driving the latest round of school-site searching in Los Altos, the TDR, or transfer of development rights, seeks to use a school’s humble scale as an asset with a concrete dollar value.

If the district buys expensive land near where students need a school and “underdevelops” it by building a school rather than high-rises, a TDR might allow the district to recoup a non-trivial chunk of the land’s purchase price.

The idea, according to Superintendent Jeff Baier, is that the district would sell the excess “right” to build square footage attached to the new land to an interested developer.

“Someone who wants to build can then go to the city and say, ‘We would like to apply these development rights in this area, or in that area,’” he said. “Once we’ve sold the development rights, they’re not ours any longer – they belong to this third party, who is responsible for working with the city to understand the application of them.”

Transferring intangible assets

A TDR uses zoning exceptions to move resources – often permission to build to a certain scale – from one place to another. Defining a zone with unexploited development rights puts an explicit dollar value on intangible resources, making them transferrable. TDR programs are created by the government entities that control the zoning exception approval process, so the swap doesn’t come as a surprise to anyone or flout government control over zoning.

This market-based technique emerged as an urban planning tool in New York in the 1960s, when the city adopted the Landmarks Preservation Law to protect historical sites from development using voluntary transactions, rather than direct government intervention.

In San Francisco in the 1980s, a TDR program downtown enabled pockets of architecturally valuable historical buildings to transfer their development potential elsewhere, at a profit – providing incentive for their current structures to stay put, unchanged.

A historical building could sell its “potential” to a grander project in a totally different place, harvesting value without requiring demolition – and a developer could apply those rights to exceed the regularly allowed zoning elsewhere, with the city’s blessing. Elsewhere in the U.S., TDRs have been used to protect farmland or natural resources in addition to guiding new urban development.

School district angle

In Mountain View, this process might help the Los Altos School District buy land without paying the premium currently commanded by large parcels. Seven hundred students from the north of El Camino Real area centered around The Village at San Antonio Center currently travel to a variety of neighborhood schools in Los Altos. The district expects that student number to grow as hundreds of apartment units currently under construction along San Antonio and El Camino gain tenants.

The district has long sought to acquire land north of El Camino to expand its school-site options. District sites tend to include extensive open space such as playgrounds and fields, and school buildings are very low in density compared with the apartment high-rises currently being built in the area. Thus, if the district were to acquire land to develop, it would underuse the density zoned for the space.

Under a TDR, that unused density could be sold as part of the land acquisition transactions. Those proceeds would, effectively, reduce the purchase price for the land. Such a process would require enthusiasm from the city of Mountain View, and a destination for that unyoked density.

TDR-type density swaps can in theory travel in either direction – developers in the Whisman area could sell density to San Antonio landowners, or vice versa. However, the process requires participation from the Mountain View City Council, which has discretion to guide the process based on perceived public benefit.

If the city thinks that students in the northern part of the city need a school site, it could encourage swaps to support that scheme explicitly. Mountain View has already introduced TDRs into its Bayshore-area planning process, so the concept as a whole is not new to the city.

Two locations in the works

Once the district sells its density, Mountain View officials and the developer who purchases the rights would hash out the details of what expanded project is born.

The city’s upcoming overhaul of the East Whisman neighborhood, currently home to 368 acres of primarily large tech office buildings, might be a destination for those rights. The plan for that area, currently wending its way through workshops and committee meetings, envisions high-intensity office areas rising up to eight stories high and mixed-use housing, retail and office structures. Projections estimate as many as 6,500 new jobs and 9,700 new housing units for the area, which already houses an eighth of the jobs in Mountain View, or approximately 11,000 workers commuting to the area daily.

Multiple sites in the San Antonio part of Mountain View’s El Camino Real change area have drawn school district interest as possible opportunities for a TDR swap.

Three parcels receiving recent scrutiny sit at the intersection of California Street and El Camino Real, the location of a Planned Parenthood clinic and a long-shuttered Safeway.

Greystar, a Texas-based developer, has revealed plans for mixed-use, high-density housing on the site, appearing to scuttle any possibility of a schools purchase.

Mountain View Senior Planner Mariya Hodge said the city has received a formal development application from Greystar that includes plans for the full area of the three properties – 641 residential units and about 15,000 square feet of commercial space.

Baier said he couldn’t comment on the Greystar project or any other nearby site opportunity, but noted that the San Antonio area had multiple other sites that might become available for a school purchase.

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