Article - Office of College Advancement
Sobrato plans golf course
By Sharon Simonson.
The city of Newark has enlisted Cupertino's Sobrato Development Cos. to pursue construction of an 18-hole golf course and executive housing on 900 acres south of the Newpark Mall.
The plan, as measured both by scale of projected development and the land mass in question, is the largest and most significant for the city in at least two decades and has the potential to bring to Newark a public improvement that it has sought since 1992.
It also could allow the Sobrato company to develop for housing a 77-acre Newark tract that it has owned since the 1980s but is now zoned for industrial use.
"This is huge," says David Schmidt, who has been Newark's mayor for nearly 30 years. "We've had some other large undertakings in the past, but for Newark's future, this would be the largest single planned development."
Sobrato, one of the largest office and apartment landlords in Silicon Valley, owns or controls more than 500 acres of the territory in question, including 277 acres owned by another of the valley's most successful commercial landlords, Peery/Arrillaga, a Sobrato executive says.
The company also has forwarded $734,015 to the city of Newark to retain consultants to begin exploring the proposal. Reports are expected at the city in April.
Despite the city's enthusiasm for the plan, questions remain as to whether it is possible as now conceived. Besides land-use planning and environmental issues, the consultants are preparing a "constraints analysis," a prelude to a full environmental impact report on the property, says Newark Assistant City Manager Jim Reece.
The evaluation should determine if it is economically feasible to develop the golf course while also addressing needed public improvements including a new elementary school and what are almost certainly significant environmental issues, he says.
The property encompasses numerous wetlands and is home to plants and animals in "special status"—such as the California tiger salamander, the salt marsh harvest mouse, the vernal pool tadpole shrimp and the burrowing owl—according to city documents.
It also includes several auto wrecking yards, which are suspected of having caused some level of soil and possibly ground-water contamination. All but one of those yards operate under temporary city permits and are expected to leave, the mayor says. The mayor suggested that getting the final one to shut down would be up to the developers.
"Economic forces would probably persuade them (to close) at some point," he says.
The golf course, which would likely measure between 7,000 yards and 7,200 yards, would use about 120 acres and should cost from $10 million to $12 million, depending on its intricacy and accouterments such as the size of its clubhouse, says Dan Powell, a principal with Kyle Phillips Golf Course Design in Granite Bay, a consultant on the job.
Who will ultimately own the golf course also is an open question. The city is interested in a public course with reasonable playing fees, the mayor says. He argues that the 300,000 people living in his community and surrounding areas now have no place to tee up and should supply sufficient demand. But he concedes that golf courses nationwide are struggling financially amid a development glut. The city of San Jose, for instance, is considering converting a public course in the Evergreen area to housing, in part because the course is not financially viable.
Tim Steele, Sobrato vice president of real estate development, also says "significant" portions of the property will have to remain untouched to preserve the wetlands as habitat. The amount won't be known until more environmental work is done, nor is it known how much housing ultimately could be developed.
About 300 acres of the property are already developed, with Ohlone College building a new 135,000 square-foot Center for Health Sciences and Technology designed to accommodate 3,500 students. The new campus, which occupies only 30 acres of the college's 80-acre site, expects to offer classes beginning in January 2008.
In addition, the land is home to a variety of existing public improvements including a fire station, community center and various sports fields.
Despite the hurdles, Alan D. Gold, president and chief executive officer of BioMed Realty Trust, says the Newark plan for a golf course and higher-end housing is a good one for the entire East Bay. San Diego-based BioMed acquired Sun Microsystems Inc.'s 1.4 million square-foot Newark campus for $215 million earlier this year.
"One of the knocks on the whole East Bay is that all of the executive housing is on the peninsula, and the East Bay has only worker-bee homes," he says. "Really it should be a complete community. Once it is perceived to have that, the East Bay will become—instead of a second choice for many—a first choice for many."
BioMed's acquisition of the Sun campus was a tremendous boost for the town of nearly 50,000 after Sun announced that it would vacate. The biosciences industry is generally coveted by cities because it is considered potentially high-growth and employs highly-educated and highly-compensated people.
Mr. Gold's company specializes in providing real estate to the life science industry. Its tenants include biotechnology and pharmaceutical companies, scientific research institutions and government agencies. It has said it will accommodate life sciences and other types of companies in Newark. So far, Mr. Gold says, demand from life sciences firms represents about half of the company's tenant prospects.
Mr. Gold said his company last month got the first 1 million square feet of the Sun campus after the information-technology company vacated the space about two months earlier than expected. Sun remains in the other 400,000 square feet.
"It's great because we now have control over the space, and we can begin redevelopment from a single campus to a multi-tenant campus," Mr. Gold says.
SHARON SIMONSON covers real estate for the Business Journal. Reach her at 408-299-1853.