Client: State of California Department of General Services

In 1996, the 300-acre site of what had been California’s first “insane asylum,” was declared surplus by the State and turned over for disposition to the California General Services Administration (GSA). The site contained more than 50 old, obsolete buildings, some of which the local community thought should be declared historic, and was contaminated with arsenic. GSA engaged Gruen Gruen + Associates (GG+A) to first conduct the market and economic research required to identify a value-maximizing re-use disposition strategy, and then to act as the prime contractor for a team of planners, engineers, environmental specialists and others to implement that strategy.

At the time the site was declared surplus, the appraisal had estimated that the property could be sold for approximately $77 million. The GG+A strategy identified a specific plan for the re-use and an entitlement strategy to obtain a General Plan amendment that would break the site into three major developments plus a series of smaller parcels, the need for infrastructure, community amenities, schools and the like.

The last development on the site was completed in 2007. By then, the property had been redeveloped in over 1 million square feet of R&D space on 82.5 acres purchased by Sun Microsystems; approximately 16 acres of housing on one corner of the site built by Citation Homes; 18 acres of multi-family housing developed by E. F. Evans, and three acres of transitional housing being maintained and provided by a county agency. One hundred fifty-two acres were sold to a consortium of Centex, Shea and Lennar, who built the award-winning Rivermark residential project, Rivermark Village Shopping Center, and a hotel. In all, the project contained over 3,000 houses, 165,000 square feet of highly successful retail space, in addition to the Sun Microsystems headquarters and hotels. The State’s receipts for the land sold exceeded $300 million, which included $22 million of participation paid on an agreement suggested by GG+A, under which the Rivermark (CSL) group agreed to share profits over a predetermined hurdle rate with the State at the conclusion of the project.

Following the build-out of the project, the City of Santa Clara was one of only ten communities in the country to be given the All American City Award from the National Civic Legion, 2001. The mayor and council wrote to GSA, thanking the State for helping them obtain this award, and praising both the quantity and quality of the multi-award-winning mixed use community that has been built and successfully marketed on the site.