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Developer Fears Loss of Netflix

A Superior Court environmental review ruling this week on the Internet streaming media giant's future location in Los Gatos could mean either it stays or goes, developer says.

The developer of the ambitious Netflix project at Winchester Boulevard and Albright Way says he's confident a judge will rule in his and the town's favor and not require an environmental impact report on the plan.

John R. Shenk, owner of the Palo Alto-based Adamas Ventures, LLC; said a negative declaration of environmental impacts issued for the 20-year project followed the California Environmental Quality Act and received appropriate level of scrutiny.

"It [environmental review] was exhaustive and complete and between the town and ourselves we followed all the rules and established processes," Shenk said.

The petition challenges Shenk's and Los Gatos government's assertion that the development would not have an adverse impact on the environment.

After settlement talks failed between the parties,

The project would eventually demolish five existing buildings on the 21-acre property known as the Los Gatos Business Park.

During its first phase, it hopes to build a

The large global asset management real estate firm The Carlyle Group, headquartered in Washington, D.C., owns Los Gatos Business Park, LLC.

The experienced developer said the tallest building, at 85 feet high, is the only opportunity for Netflix to grow in Los Gatos, if it stays.

If there's a ruling in the Citizens' favor, Shenk said he didn't know if it would be appealed and noted there are many ways for the judge's order to come down.

In terms of costs related to the lawsuit, if the town and the developer are required to conduct the EIR and pay for legal fees, the project entitlement indemnifies the community and requires Shenk to reimburse for all costs associated with the legal challenge, Shenk explained.

If no EIR is required and the negative declaration is accepted, Shenk said it would be a matter of months before demolition would begin at the property, razing some of the buildings to make room for the project's first part to be constructed. "Those plans are ready for submittal," he said.

A building permit application is also ready to go after a meeting with town officials a few weeks ago, he said. "Once we are ready to move forward and the judge allows us to, we'll move quickly to respond to Netflix's timing desires."

But if the Citizens appeal, the deal could be further delayed.

There's also not a definitive lease from Netflix because the developer has to be able to tell the company when it could deliver the future building, Shenk added.

Citizens' critics, who declined to be identified, say the petitioners just want to stop the project and are using CEQA to do that.

"At the end of the day, , by forcing the delays, they could," said a member of the group We Support Los Gatos, which came together to respond to the Citizens' allegations.

Killing the Netflix project will have an adverse effect on the town and its schools, which desperately need the millions of dollars a year the company generates in sales tax revenue, they said.

We Support Los Gatos members also say while CEQA is a well intended law, in the hands of someone who wants to use it to achieve a political agenda, it's easy to do.

The Citizens contend the project would create adverse environmental impacts, the biggest one being traffic, which would increase by 25 percent or about 3,000 new car trips, about 400 of those during peak commute morning and afternoon time.

The Citizens' attorney, Rachel Mansfield-Howlett, said CEQA is a citizen-enforced statute. "It's the only way that CEQA enforcement happens," she said.

Stay Frosty March 28, 2012 at 04:16 PM
and the meek shall inherit the earth..
Mike Calahan March 28, 2012 at 04:58 PM
The Carlyle Group, headquartered in Washington DC, probably has Los Gatos' best interest at heart and would better know what is best for LG than some pesky resident. The Citizens' group appears to be insuring the project goes forward by requesting all of the I's are dotted and T's crossed. I don't see why a group calling themselves We Support Los Gatos is not doing the same thing. If you support your town, then be sure a project is good for the town in all ways, not just monetarily.
Larry Arzie March 28, 2012 at 05:38 PM
Excuse me but here is no guarantee of a sales tax revenue as Netflix is committed to ending it'taxable CD product. There was never a guarantee that Netlix was going to be a tenant. Why would they pay 5.00 a square foot when they could pay 3 dollars or less by moving north. The only guarantee provided is for the developer to be able to build, depending on the economical climate, just about whatever he wants. I am sure that when the legal process has played out there will be enlightening details on how our Town Manager and Staff operates behind the scenes.
AR March 28, 2012 at 06:20 PM
hello and thank you for giving me an opportunity to speak! i'm j. lester goodyear, and i'm here to speak to you about the evils of density. i represent a coalition of GM, ford, toyota, and exxon. we don't like large buildings any more than you. americans love highways. why create the density needed to make mass transit viable when you can just drive ten more miles and plop down another disposable one-story office park? i know we're all aware of the evils of congestion. i mean, where would you rather live - palo alto or morgan hill? duh! you know people are turned off by palo alto's density and congestion given the plummeting real estate values there. now once all the employers are driven out of los gatos, you might see your home value drop by a third, but thats just fine, because thats just part of getting back to 1975, where we all want to be.
Stay Frosty March 28, 2012 at 07:37 PM
I think it more has to do with location..Palo Alto being closer to San Francisco, Stanford, and venture capital..Morgan Hill being closer to a farm. That being said, if mass transit is our only hope, then build a Disneyland Monorail system down Highway's 17, 85,, and 280..or, telecomute.. Last but not least, if one likes density..Sao Paulo Brazil awaits you :) Plenty of jobs there..
OV March 29, 2012 at 05:40 AM
Well put! I am not understanding the argument against higher density areas either, especially when it comes to office buildings. We all want to live close to where we work, and I think it's absolutely ridiculous that we are forcing urban sprawl onto projects like these. As a side note, it's incredibly frustrating to see new strip malls that have parking lots twice the size of the shops. What waste! Why aren't we requiring any new construction to include either underground or multi-story parking?
Chris Bevis March 31, 2012 at 03:54 AM
I am currently looking a class A office and lab space in north San jose at less the $1/sq. ft. If The tenant won't commit to a lease, the town should walk away.
Peter S. Carter March 31, 2012 at 03:24 PM
At a time when towns and cities throughout California are facing unprecedented fiscal crisis and even bankruptcy, Los Gatos is incredibly fortunate to have Netflix headquartered here. This lawsuit is completely ridiculous and an abuse of our legal system...a perfect example of tactics self proclaimed environmental saviors use to the ultimate detriment of all consumers and taxpayers. If Lee Quintana and others of her ilk were held financially responsible for their specious lawsuits if and when they were dismissed, there would be less of this nonsense going on.

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