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Mayor’s Claim that the City Had ‘$10 Million Offer’ for Loyalton Ranch Is Bogus

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After much back and forth, repeated deferrals and fact finding, the Santa Clara City Council has finally opted to sell Loyalton Ranch. The assessment of the property — located just outside Reno — values it at $4.7 million.

However, Mayor Lisa Gillmor has repeatedly challenged whether selling the property is the right course, saying the City is “leaving money on the table” going so far as to call the sale “a gift of public funds.”

Gillmor has repeatedly claimed the City received a $10 million offer back in 2017-18.

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Selling the land has been on the Council’s radar since last year. Vice Mayor Suds Jain challenged how lucrative the grazing rights — what the land has been used for the past 30 years — are for the City. In the wake of the pandemic, especially after a massive wildfire razed 90% of the land, Jain believed the City could use the money from the sale to staunch the City’s financial bleeding instead of sitting on its hands until the land appreciates.

Gillmor and political ally Council Member Kathy Watanabe have continually opposed the sale, mostly fallaciously appealing to tradition saying the City “does not sell land; it holds onto it.”

The problem with Gillmor’s claim that the City was offered $10 million for the 10,000 acres of land is that it is almost certainly untrue.

Understanding The Value

Where Gillmor got the notion that the City received a $10 million offer from a buyer has not been explored. Nobody other than her has stated this. Not the city attorney. Not the city manager. Not the head of Silicon Valley Power. No other members of the Council. Nor has any member of the Council challenged her claim.

Gillmor simply stated — repeatedly — the claim without any substantiation.

“If Lisa thinks it is worth that, she should make an offer,” Jain wrote in a text message to The Weekly. “The City should not be in the real estate speculation business. Appraisal says that is what it is worth now. I certainly don’t have a crystal ball for future real estate values.”

Further, Jain wrote, the City clearly did not consider conflict of interest rules when Gary Gillmor — former Santa Clara mayor and Lisa Gillmor’s father — brokered the deal in the late 1970s.

In 2017, Rajeev Batra — who at the time was interim City Manager and has since returned to re-assume that role after the Council fired Deanna Santana — recommended selling the property, which the City bought for $1.6 million.

At the time, City was on the cusp of a deal with realtor Far West. Pete Nevin, a land consultant who was working with Far West in 2017, said the valuation of the land in 2017 was between $500 and $1,000 an acre. Nevin suggested valuing the land on the upper end of that range, but no appraisal was performed. No contract was executed. No offer was made.

That was before the fire.

Because the land only has seasonal creeks and has been so badly charred, Nevin said the land has little value, saying it’s “reached its bottom.” The land will take roughly 20 years before it is viable again, he added.

“It was a decent mountain property before it burned. That’s why it was reasonable to ask $10 million,” he said.

Admission

According to records request submitted by The Weekly, in October 1999, Ralph F. Pavey appraised the property “as is,” valuing it at $2.6 million, adding that the sale should take place in one-to-two years.

The request further inquired about a written offer for $10 million Gillmor claims the City received. It returned a response that “The City has not found any records of an offer.”

To date, the only interest in Loyalton Ranch has come from the California Dept. of Fish and Wildlife (CDFW). In an email, Josh Bush, a wildlife biologist, told the City his department wants the land as a deer migration route, saying it is “well situated to add to a network of conserved lands in the area.”

Bush also previously spoke during public comments for the agenda item, expressing CDFW’s interest in the property. Earlier this month, Bush repeated CDFW’s interest in the property but said he had not heard from the City since March.

As he understands it, Jain said, Santa Clara never received a “firm offer” for Loyalton Ranch.

“Have Lisa produce the name of the person who made the tentative offer, and then we can go talk to them,” he wrote.

Now that the Council has pulled the trigger on selling Loyalton, it must refrain from action on the property for two months. Then, it must give notice to buyers, who then have three months to negotiate in good faith with the City to purchase it.

Whether an offer close to the $10 million Gillmor has claimed the property is worth will come in, remains to be seen.

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2 Comments
  1. Russ Mancillas 5 days ago
    Reply

    Wow, is somebody lying?

  2. GoodShipSantaClara 5 days ago
    Reply

    Looks like Mayor Gillmor has an opportunity to buy up the land for a song. Or someone does. I have to wonder who’s livestock is grazing on this land. I’m surprised that’s not part of the reporting. Could be there was a sweetheart deal there for someone.

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