Council agrees to $3M purchase of land

Agreement hinges on city finding a trustee for property

In a resolution two years in the making, the Morgan Hill City Council has moved forward with the purchase of 33 acres of land in the Southeast Quadrant from Chiala Farms. However, it remains to be seen if the city can find a trust or steward to take care of the site and enforce an open space easement on the property.

The land is on what is called the Fountain Oaks Ranch and will cost the city $3 million from the city’s Agriculture and Open Space Preservation Fund.

Originally expected to be land used for agricultural mitigation if the Local Agency Formation Commission (LAFCO) had approved the annexation of 60 acres near Tennant and Murphy avenues, the property will now solely and forever be used to preserve agricultural land.

LAFCO denied a motion to approve the annexation Dec. 5 with a 5-2 vote, despite Santa Clara County Supervisor Mike Wasserman’s motion hinging on the city’s purchase of the Chialas’ 33 acres.

The commissioners passed the staff report denying the annexation, 4-3, with Commissioner Rob Rennie changing his vote.

Following the five-hour LAFCO meeting last Wednesday, Morgan Hill city staff and Mayor Steve Tate headed to the council meeting, where the City Council unanimously approved the purchase of the Fountain Oaks property, to the East of Hill Road and North of Maple Avenue.

Despite the council’s unanimous approval, the decision did not come without disagreement between the council, the Open Space Authority, the county and the Santa Clara Valley Land Trust. The original land purchase was supposed to be 68 acres, partially funded through grants from the county and the High Speed Rail Authority.

Those grants were not approved. The city’s staff report describes the fallout: “Unfortunately, despite the best efforts of the County, the Authority, and the City’s Team, the State’s concerns about the high cost of the [agricultural conservation easement] have resulted in the grant funds being unavailable.”

The city then worked with the property owner—the Chiala family—to identify land the city could purchase on their own through the city’s Agriculture and Open Space Preservation Fund.

The agricultural conservation easement will need a trust to look after the land. Council member Rene Spring put forward the motion to approve the purchase, hinging on a reputable trust agreeing to oversee the use of the property.

Spring’s condition came after friction between the Open Space Authority, the Santa Clara Valley trust and the City Council erupted at the meeting. Hours before the council meeting, the Open Space Authority had sent a letter to the council explaining they would not be able to serve as the trustees to the property.

“Neither the Santa Clara Valley Open Space Authority nor the Land Trust of Santa Clara Valley would be in a position to hold and steward this conservation easement as proposed,” the letter said. “The easement development process does not conform to Land Trust Alliance Standards and Practices and it does not reflect how we, as conservation organizations accredited by the Land Trust Alliance, would choose to work with the landowner, the City and other partners to prepare an effective and enduring conservation easement.”

Greg Leonard, who spoke on behalf of the Santa Clara Valley Land Trust, said the trust had worries about Morgan Hill’s plan for agricultural preservation.

Leonard first said the trust would not be able to look after the property because they had not been involved in negotiations. He later went on to say the trust worried that Morgan Hill did not have a well thought out plan for the agricultural conservation easements the city was acquiring.

Council member Larry Carr and Leonard sparred over the trust’s reasoning for not supporting the purchase. Carr asked if the purchase could be approved with Council member Spring’s condition, allowing for the trust to be a part of final negotiations with the property owner and the city.

Leonard said that would not appease the trust as there was still concern over the city’s overall agricultural conservation easement plan.

“If that’s what the land trust and [the Open Space Authority] and the county are suggesting to us, then maybe they’re not really committed to preserving agricultural land in the South County,” said Carr.

In a heated exchange Leonard answered back, “We’re interested in preserving it in a holistic and realistic way.”

Bill Chiala represented his family at the City Council meeting and told the council during public comment that there would be no issue finding a suitable trust for the property.

He said the time spent on the deal only to not lead to the purchase of the property would be a breach of trust.

“Rene, we can get you a land trust, I can guarantee it,” said Chiala. He later stated, “You put the condition on there, we’re open to that.”

The resolution passed the council unanimously, with Spring bringing the motion forward attaching the condition that a trust must be found before the purchase is complete.

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