LASD receives $4M from developer for 10th-site purchase

24-Hour Fitness” width=
Town Crier File Photo
24 Hour Fitness currently sits on part of the land the Los Altos School District is purchasing for a 10th school site.

The Los Altos School District is receiving a $4 million contribution from real estate developer Greystar to help fund the purchase of a 10th school site at the corner of Showers Drive and California Street in Mountain View.

Greystar is in the process of creating a mixed-use development with 632 residential units and 20,000 square feet of commercial space nearby at the corner of California Street and San Antonio Road. The school district had previously considered using eminent domain to take the land that Greystar is building on, dubbed the “Old Mill/Safeway” site.

“We were looking at the Old Mill/Safeway site as a possibility,” said Randy Kenyon, the district’s business director. “The property owners weren’t interested in selling. We were talking about condemning them through eminent domain.”

Ultimately, the district decided to pursue a site across the street, currently occupied by Kohl’s, 24-Hour Fitness, Joann Fabrics and other smaller businesses. The district is purchasing the 11.65-acre parcel for $155 million from Federal Realty, a willing seller, and the sale is expected to close Dec. 4.

The district’s board of trustees unanimously approved an agreement with Greystar to accept the $4 million at an Oct. 28 meeting. As part of the agreement, the district says it will be supportive of Greystar’s planned development at the Old Mill/Safeway site and not interfere with its completion.

“They want the assurance that we won’t oppose the project and that we won’t use eminent domain on that property,” Kenyon said.

Avoiding eminent domain

If the district did decide to try to take any of the land Greystar is building on, including through eminent domain, upon Greystar’s demand, the district would need to return the $4 million contribution and pay an additional $1 million to the developer.

Beyond the agreement with Greystar, Kenyon pointed to other reasons why it was in the district’s interests to avoid using eminent domain. Buying a property from a willing seller, such as Federal Realty, saves time and money, he said, when compared with the unknown and potentially large cost of a legal battle over the use of eminent domain.

According to Kenyon, Greystar and the property’s owners both had a “vested interest” in the district not seizing the land through eminent domain. Greystar approached the district and offered to help connect officials with Federal Realty, Kenyon said, in the hopes the district would purchase the Kohl’s site that Federal Realty owns instead.

“They were instrumental in getting us over to the Kohl’s site and starting to broker a deal between us and Federal,” Kenyon said.

In addition to the $4 million from Greystar, the district expects to receive a $1 million contribution, but Kenyon said the source of that money likely won’t be made public until escrow closes on the 10th-site purchase.

The district also is using a number of other mechanisms to help offset the purchase cost, including selling two acres of the site for $20 million to the city of Mountain View for use as a city park. The city will contribute an additional $23 million for use of the school’s recreation areas during nonschool hours. The district also plans to sell 610,000 square feet of unused development rights to various developers for a total of $79.3 million.

According to Kenyon, the $4 million from Greystar is one part of helping to offset the costs of the 10th-site purchase.

“It helps us afford the site; it’s another funding source to keep our net costs down,” he said. “Any money is helpful, (and) this isn’t an insignificant chunk.”

Greystar declined a request for an interview.

Schools »

Read More

Sports »

Read More

People »

Read More

Special Sections »

Special Sections
Read More

Photos of Los Altos

Browse and buy photos