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On Sunday, June 6, 1999 the San Jose Mercury News published an fascinating, informative and heart-breaking article of some of the folks in Coyote Valley. I emailed the author, Tracie Cone, that afternoon after a Coyote gentleman called me to let me know it was in the paper. I would have missed it and thought perhaps many others may have missed it too. I told Tracie that I would love to broaden the access to the article by having it up on our community web site. I have been putting links to other Mercury articles on the site, but apparently the Mercury doesn't put the West articles on their web site. I asked if we could get the article up on the web. Sure enough, Tracie just emailed it to me.

Thank you again Tracie! I think you did a wonderful job with the article and I appreciate you getting it published. [SAS]

LAND'S END

AFTER 40 YEARS OF WAITING, COYOTE VALLEY AND THE PEOPLE WHO HAVE FARMED IT FINALLY FACE THE TRANSITION FROM RURAL TO URBAN

Published: Sunday, June 6, 1999 Edition: Morning Final Section: West
Page: 8
Memo: TRACIE CONE (tcone@sjmercury.com) is a staff writer for West.

Illustration: Photos (8)

Source: BY TRACIE CONE

OUT PAST San Jose's southernmost Taco Bell, past a slew of peach-colored homes with four bedrooms for the kids but tiny yards, past the urban fishing pond stocked on Thursdays with mountain trout, Coyote Valley opens up to reveal Santa Clara County's agricultural past.

The Stage Stop serves morning imbibers the way it did when it was a horse-and-buggy pit stop on El Camino Real. Two bait shops, a tattoo parlor and a Harley repair shop are the bar's Monterey Highway neighbors, the bulk of the commercial establishments in an otherwise agricultural oasis.

Where the scent of damp earth and fresh hay fill the air, Ken Saso grows succulent pears, prunes and cherries to sell at his roadside stand. The Joneses add to the mix with sweet corn and other vegetables. The Gils' crop is sod, a 140-acre, meticulously clipped lawn of fescue and Kentucky blue that may end up carpeting your neighbor's back yard.

Probably nowhere in California is the contrast between farming and urban development more stark than in this 6,000-acre island of plowed and furrowed loam still bare in the sea of red tile roofing that covers the rest of Silicon Valley. And probably nowhere else is a citizenry torn equally between a desire for housing and the guilt caused because its ravenous consumption, in just one generation, has completely altered a way of life.

''There was some guy down here the other day taking pictures,'' says Erin Gil, the sod farmer. ''He said he wants to remember it looking beautiful, like it is. But we've also had all kinds of phone calls from people who want to buy into the future--or what they perceive the future to be.''

Since 1984, when the 101 freeway opened between Bernal Road and southern Gilroy and the Monterey Highway became a back road, Coyote Valley, between the abandoned truck weigh station in the north and the estate homes of Morgan Hill to the south, has been our Sunday drive, our gridlock bypass, our trip down the rabbit hole where we could imagine ourselves in a simpler, low-tech time and perhaps return to reality with a quart of fresh strawberries.

Now that Cisco Systems has announced plans to pursue development in Coyote, the future of the region is again being debated by both bureaucrats, whose job is to grow our economy and house our workers, and environmentalists, who wonder when enough is enough. But Coyote's farming fate was sealed 40 years ago, back in the universe-conquering aerospace days when bigger still meant better and an annexation-crazed council gobbled up pieces of a sleepy valley 15 miles from City Hall and began working on a plan for roads, housing, industry and shopping.

''The save-the-farmland issue is never properly about the last acre,'' says Carol Whitesides of Modesto's Great Valley Center, a non-profit organization studying farmland issues. ''You can get to a tipping point where agriculture is no longer viable. Silicon Valley probably lost its critical mass a long time ago, but maybe the discussion will spill over to ag regions that are still viable.''

An economic bind

After annexation in 1958, Coyote farmers, who amortize equipment over generations, began thinking short-term. Why buy new discs or replant orchards if development is imminent? Tractor parts shops moved to faraway places not under a farming deadline. Seed and herbicide distributors sought more fertile economies. Farmers not only had to pay city taxes after annexation, but the land was valued at its highest possible use; paradoxically, since development was frozen, they couldn't sell it for those kinds of prices.

As the rest of Santa Clara Valley's orchards and farms surrendered to development, canneries and packing houses migrated to the Central Valley, leaving Coyote, the last farming stronghold, in an economic bind.

''There's a lot more involved in farming than just having the land,'' says Nancy Richardson, executive director of the Farm Bureau of Santa Clara County. ''How can they compete when the guy in the San Joaquin Valley is paying a minuscule amount to truck his product to the canners?''

The high cost of housing in Santa Clara County means that farmers have to pay more for laborers--if they can get them. Housing often isn't even affordable. The usual source of labor--farmers' kids--often aren't following their ancestors into what they see as a dying family business. The average farmer in Coyote is pushing 60. No agency keeps track on their numbers, but the best guess on the number of people growing something in Coyote is about 50.

''Every little thing is another financial burden on a shaky teeter-totter,'' says Richardson. ''Every new problem changes the dynamics of the situation. It takes very little additional expense to tip the teeter-totter to the non-profitable side.''

One Coyote hay grower faces a larger dilemma brought by urbanization. He farms several fields, driving his combines and tractors on public roads to reach them. However, because so many commuters now use Monterey Highway and the paralleling Santa Teresa Road to avoid congestion on 101, his insurance company no longer will cover him as he moves his equipment. Does he buy several sets of equipment? Take his chances without insurance? Or give up and move on?

More and more often it seems that farms and tract homes do not make good neighbors. As homes sprouted in the south, residents pressed for regulations to stop Coyote farmers from spraying pesticides on their crops by air, the most efficient but least accurate way for them to do it. Now crop dusting is banned north of Leavesley Road in Gilroy.

''Incrementally, more and more things that farmers need just to survive are being taken away from them here,'' says Richardson, whose organization is sponsoring a summit this fall to find a ''peaceful coexistence between urban and rural interests. ''It's making it infinitely more complex for them to raise crops.''

Forty years in limbo

In 1958, 35 landowners in the Coyote Valley--including old-time families such as the Sasos, Puppos, Tripolis and Nakaos--agreed to have their orchards and pepper fields annexed into the city of San Jose. In return they were promised water, sewers, street lights, police and fire protection and other essentials for development. Farmers had seen what had happened to their counterparts to the north, who sold their 50-acre orchards for Lockheed-area developments and shopping centers, then bought 1,000-acre spreads in the Central Valley--or retired. Whoever owned land in this rapidly developing community was sitting on a gold mine. Land recently assessed at $200 an acre was suddenly worth $7,500.

''We figured it was our turn,'' says Ken Saso. ''It was our turn. We figured development was just around the corner. You don't want to sink a lot of capital back into your farm when you think it's going to end soon. You don't replant orchards, you don't buy equipment. I figured we'd buy a new place down around Hollister and keep farming. I love this life.''

In 1927 Saso's grandfather bought the 60-acre family farm, where Palm Avenue dead-ends at the Monterey Highway, after selling his prune grove in Campbell for development of Valley Medical Center.

''I was raised in this house,'' says Saso, 55, sitting in the kitchen of the two-story farm house with stained glass and leaded windows that rattle when Harleys and tractor-trailer rigs and police blaring sirens speed by on Monterey Highway, now widened to within 20 yards of his foundation. ''Back in the 1950s, though, they told us we were in the 'Path of Progress.'''

What Saso and his fellow farmers didn't know was that the city of San Jose would soon freeze development on their Coyote Valley land until it could come up with a plan for development that would sustain growth. The city wanted industry first, even as the county became starved for housing.

That decision would leave Coyote landowners in economic limbo for the next four decades.

''We had no idea that was going to happen,'' Saso says. ''We're dumb, but we're not stupid.''

To Saso, the decision was like someone telling him he can't cash in his 401k and retire. His land is now his retirement fund. He can't get its full value until the next buyer is free to do with it as he or she wants.

''I've had plenty of offers on my place,'' Saso says, ''but who wants to buy it at a good price if they can't do anything with it? How can I sell it when the city has depressed the value? Nobody will buy it for farming when farming is coming to an end. I can't sell it for development because the city so far isn't allowing any.''

For nearly 30 years Saso has been fighting the city to regain control of his property, which he almost lost in 1975--before the rollback brought by Proposition 13--because the $18,000 in annual taxes on his property was more than he made growing fruit. Back then the theory of tax assessment was ''highest and best use.'' If a farmer owned an orchard next to a shopping center, the tax would be based on commercial or residential usage.

Unlike other urban-area farmers in California, the Sasos did not take advantage of the Williamson Act in 1965, the measure that offers tax breaks to farmers who will keep their land in production for at least 10 years. He thought he didn't have 10 years of farming left. ''I would have figured out a way to do it, though, if I'd known we weren't going to develop for all of these years,'' he says.

In 1975 Saso made news when he went to Sacramento and begged the Legislature's revenue and taxation committee for help with the $110,000 in taxes that had accumulated since annexation. Eventually the county bought 12 of his acres for the Coyote River Park and the money helped pay his debt.

Saso says that while he struggled and held on to his farm, many of his fellow farmers weren't as lucky. Some lost their land and others were forced to sell. After the tax fight, Saso helped form the Coyote Valley Landowners Association, and sued the city for ''confiscating'' his property by restricting development rights. After two years of fighting and three months in court, Saso lost.

''The judge said we never had applied to develop anything, and we hadn't,'' Saso says, ''so technically the city never turned us down. I think that if we had gone back and applied, been turned down, then sued again, we would win. But it exhausted our family and it exhausted our money.''

It also exhausted Saso, who came down with non-Hodgkins lymphoma a few years later and disappeared from the political scene when his doctors told him to avoid stress. He underwent a bone-marrow transplant at Stanford and has now been cancer-free for five years.

Now he's back and hoping that there is light at the end of his tunnel--''and I hope the light isn't a train,'' he says. Saso hopes that if Cisco succeeds in bringing jobs, the city will open the valley for other development. He hopes this isn't just another false alarm like landowners experienced in 1984, when Apple and Tandem announced plans to build in Coyote, then backed out when the economy went sour. That year Saso was featured in another Mercury News story, one of many over the years in which he was quoted as saying that he was tired of waiting to regain control over his property.

''I've seen development skip over us and go to Morgan Hill, then Gilroy and now Hollister and Los Banos--all the places I wanted to go and farm,'' Saso says. ''People are driving long distances to work because they can't afford houses here. I'd like to see the people responsible for this mess stand up and say that they did it.''

Now, nearly 39 years after the city planning department wrote ''San Jose: Design for Tomorrow,'' one of Coyote's first plans for development, the Sasos and their few and far between neighbors still get water from wells, and drain into septic tanks. And he still makes his living by selling fruit at a roadside stand.

''Thank God we're survivors,'' he says. ''Everyone says that this is really Coyote's time now.''

The right time for Cisco?

Cisco Systems' plan is to build a $1 billion campus on 400 acres along Monterey Highway in north Coyote Valley, in the northern third of the valley reserved for industry. The campus ultimately will accommodate 20,000 workers. Already the Internet networking company employs 17,000 worldwide, including 8,300 in the Bay Area.

The project would be a windfall for San Jose, where there are more people than jobs. It means that other towns where there are more jobs than people, such as Palo Alto and Santa Clara, reap the tax benefits of having high-tech industry, while San Jose has the expense of providing city services to houses.

The land is still available because after two decades of rapid expansion, San Jose opted in the '70s to develop parcels closer to the city center to save the cost of extending water and sewer lines, and of providing police and fire protection and public libraries.

''Back in the '50s and '60s the city was aggressively annexing anything it could get ahold of,'' says Kent Edens, the city planner who has overseen the Coyote area since the '70s. ''It was a tremendous leapfrog--not exactly rational planning. Somewhere along the line a decision was made to grow the city first, not something 30 miles from downtown.''

So San Jose designated Coyote an ''urban reserve,'' a land savings account, which meant it was being held until the city absolutely needed it for expansion. Future growth depended on industry coming first in the north to provide jobs, then the middle third of the valley could be developed for housing, while the southern third would remain a greenbelt buffer between San Jose and Morgan Hill.

''The policy decision was made then,'' Edens says, ''that when the timing is right, when we need the area to provide for expansion, and when we can afford to provide for the services and it doesn't come at the sacrifice of existing population, we'll do it. Willow Glen, for instance, shouldn't have to subsidize Coyote Valley. That gave some level of long-term expectancy, but there was no time frame put on it, and there still isn't.''

A secondary goal of planning for city development has been to reduce traffic on the highways. The city wants to reverse the commute that now sends high-tech workers north. The city has said that only after jobs are in place will it allow the development of houses.

It's still not certain that Cisco will move forward. There are areas of contention that have not yet been decided: Will the city or developers pay for infrastructure such as drainage, water and sewer lines? Who pays for the new access to 101 that will be needed?

Those issues could take months or longer to decide, and city officials appreciate that landowners like Saso have been waiting a long time.

''I know what they're going through; I have a friend who has an orchard down there,'' says the mayor's budget and policy director Joe Guerra. ''His trees are dying and he doesn't know whether to replant them. So emotionally, yes, I do hope that something good happens sometime soon. Intellectually, the reality is as landowners, there are no entitlements to build anything to begin with. As landowners, if you step back and ignore the heart-string tug of farmers and say 'developers' and 'land speculators,' well, everyone knows they're not entitled to anything until they get their zoning.''

Soon after Cisco's announcement, the Greenbelt Alliance, or ''People for Open Space,'' as its motto says, began putting pressure on the city to go slow with development. In April the organization held a news conference in Coyote to release the ''Coyote Five,'' a set of principles it says should guide development in the area:

1. Honor the General Plan Development Triggers (including the creation of jobs, a balanced city budget, a financially sound city government, and proof that services elsewhere will not diminish).

2. Development should pay its own way.

3. Regional impacts related to traffic and housing should be addressed.

4. Development should help fund permanent greenbelt protection.

5. Development should be done right.

The Alliance currently is sponsoring a series of workshops for farmers and other landowners on establishing agricultural buffers--areas where development rights are purchased on properties so that homes and buildings don't abut working farms. South Coyote is prime area.

''We're trying to build a program to use easements to maintain agriculture,'' says the Alliance's Kaitilin Gaffney, the South Bay field representative. ''We want to make it easier for farmers to keep it going.''

Through the workshops, the Alliance hopes to identify areas that should be buffered and persuade landowners to participate in the program. Money is available from state and private grants, but because of the high cost of land in Santa Clara County, the $3 million to $5 million that they may have to work with won't go far.

''Santa Clara County is on the cusp,'' Gaffney says. ''It still has a lot of agriculture left in the southern part of the county, but this is not Napa or Sonoma where they have recognized the value and protected it to minimize these types of conflicts.''

When Coyote is fully developed, about 25,000 homes will be built between the industrialized north and the greenbelt that begins at Palm Avenue.

That is if the economy stays strong. It didn't for Apple and Tandem, which canceled their building plans when the economy took a dive. (They later developed their own economic problems.) Now Cisco could be the project for which the city, landowners and developers have been waiting. The timing apparently is right. There are no large parcels of developable land left in San Jose.

''We're hopeful this is it,'' says Michael Bruner, senior vice president of Sobrato Properties, which since 1984 has owned 300 grassy acres at the southwest corner of Bailey Road and Santa Teresa, the planned industrial tract. ''However, there has not been an increase in the level of interest because of Cisco's announcement. That won't change until Cisco puts a shovel in the ground and makes a true commitment to the property. On the other hand, if Cisco doesn't go forward, I still think Coyote's time has come, if you will. There's not much property left in the South Bay. Within the next year or so, something will happen.''

Squeezed out of business

The Coyote Valley is 6,000 acres of bottom land covered with three types of soil. For the most part, it's prime farmland, the kind of fertile, Class 1 soils that grow several crops a year. The kind that Whitesides, in the Central Valley, is working to protect. Some are sandy, some are heavy with clay. Since the area once was a meandering river bottom, the quality and thickness depend on what was deposited by the Coyote River. In some places west of Santa Teresa, a 1974 soil survey shows it's a meager Class 3, good for not much more than cattle grazing.

''Orchards do better on sandy, loamy soils where the roots can get through,'' says Bruce Eisenman, a soil expert with the U.S. Department of Agriculture's field office in Hollister. ''Usually soils that are heavy in clay are used for row crops. That's why you see both crops in Coyote.'' Drainage in the valley always has been a problem. Heavy winter rains stand in the clay fields for weeks, and drainage is something with which developers will have to contend, especially after water-absorbing soil is paved over. Drainage lakes will consume large chunks of property. Storm drains will have to be installed. Whether developers or the city pays for them is one of many infrastructure sticking points.

Few Coyote farmers still actually own the soil in which their crops are grown. Families such as the Sasos and the Puppos are exceptions. Most lease their land for an average $300 an acre from developers like Sobrato, which bought it believing that some day the dike would break and development would spill into Coyote.

Back in 1969, when William Gil founded the Grass Farm, land for leasing still was readily available. Recently, however, Gil and his son, Erin, have begun feeling squeezed. Up until two years ago they leased 170 acres. Today they are down to 140.

''The owner sold 30 acres two years ago for future development,'' says Erin Gil.

Half of the land they lease is in the city's urban reserve, the other half in a greenbelt that is supposed to remain in farming to keep a buffer between San Jose and Morgan Hill.

The Gils run a relatively small operation in the 50-year-old business of growing instant lawns. It takes about six months before turf is established enough to be cut into 9-square-foot rolls by a $60,000 harvester and shipped to a buyer, which makes for a slow turnover. Sod farms in the Central Valley can be up to 600 acres and more, which means high volume and lower prices.

''We have tried to find our niche,'' says Erin Gil, squinting as tractors plowed a field into shape. ''We are closer to our market than they are. We try to be accessible. We have diversified into other types of ground cover. Customers can buy directly from us, so we don't have to harvest until we have an order.''

The Gils' days of greening new homes and businesses in the Bay Area obviously are numbered. Every sale that covers the front yard of a new home or business park in Silicon Valley means they are closer to being developed out of business, which causes a bittersweet feeling for Erin Gil, who lives in Morgan Hill.

''There is a dichotomy there,'' says Gil, who at 37 is younger by two decades than the average person farming in Coyote Valley. ''I've got to keep working at least another 25 years. We're looking for new ground, but we can't find it locally. I was looking down in Fresno last week.''

The Gils are also considering splitting the operation--farming on whatever land they can in Coyote for as long as they can, and picking up another parcel of acreage near Hollister, until development takes over there too. With the cost of a good tractor at $85,000 and a forklift at $50,000, it may not be a sound economic proposition.

''I've been trying to research how we can farm two places 30 miles apart with the same number of people and not much more equipment,'' Gil says. ''I haven't figured it out yet.''

Survivors

The beginning of development in Coyote doesn't necessarily mean the end of an agricultural lifestyle in Santa Clara County. ''If you look at a map of Santa Clara County, says Kevin O'Day, the county's deputy agricultural commissioner, ''you can still drive another hour east from Mount Hamilton. Half of this county is rural rangeland and people are still running cattle on it. That is all agricultural. Intensive farming occurred on the valley floor, and we can still do that, to a lesser degree, with some planning.''

The farmers who are most successful, he says, are ones who have switched from low-value crops such as hay and grain in favor of specialty vegetables, or even the types of things we like to eat fresh, such as sweet corn and strawberries. Coyote farmers John Speno and Nicholas Jones both direct-market their summer vegetables at roadside stands on Santa Teresa Road. A farmer needs a lot of traffic to direct-market, which is why roadside stands are more successful for farmers here than in the Central Valley.

Mushrooms, grown in relatively small indoor areas around Morgan Hill, are now the county's No. 1 crop, followed by plants grown in nurseries and cut flowers. There are still crops, such as strawberries sold at roadside stands, that can earn a farmer a good living on a 5-acre plot of land.

The most successful urban farmers, officials say, are ones who are willing to turn their crops into a finished product. A tomato and pepper farmer can earn a better living by converting the vegetables into homemade salsa.

''If you do some value-added processing to it on the farm,'' O'Day says, ''you can get a better price for it in the end.''

If planners find ways to help make urban agriculture viable, perhaps Santa Clara County can avoid the fate of Orange County, where the shell of a tin-sided sugar beet factory that operated in the 1950s and '60s now houses the lobby of a La Quinta Hotel in the shadow of a busy freeway.

In Riverside County, once sweetly scented by tens of thousands of acres of orange groves, county officials recently declared one of the few remaining a historic resource.

''Now oranges in Riverside are reminiscent of another day,'' Whitesides says. ''This is an enormous issue that is beginning to weigh on people. On the one hand, we don't want to argue too long about a resource that's not viable. On the other hand, maybe thinking about it now in the Silicon Valley will help translate into people being more proactive in other places. We want people to look at the bigger picture.''

Every May around Mother's Day, Saso drives to the Central Valley, returns with a load of fresh cherries, and opens his Monterey Highway fruit stand. When local fruit ripens, he sells that. In the off-season, he sells firewood--some from his land, some from expired groves in the Central Valley.

''I used to be open every day before 101 opened up,'' he says.

That was back in the mid-1970s, when IBM came to Coyote and the city again began talking about allowing development. Saso was so sure development was imminent, he vowed he wouldn't shave his beard until ''I got my property rights back.'' He sported a scraggly beard for several years, then, as the years passed, trimmed it down to a mustache. He lost it during chemotherapy and hasn't been able to grow a good once since.

Now he think he may not have to.

''I think this is it,'' he says. ''I feel I'm fortunate to still be here--for more reasons than one.''

Time has a way of changing people. Experiences alter perceptions. After all he has been through over the past 40 years, Ken Saso's goal has simplified.

''What I wanted to do at first was go farm somewhere else. Maybe Hollister, maybe in the valley, but I just wanted to get the hell out of here,'' he says. ''I wasn't looking to become a millionaire.

''Now I'm back to simply wanting to restore my choice. I want to be able to make decisions affecting my property. My choice might be to stay here. My choice might be to sell and leave. I don't know. I just want to be able to make that decision myself.''

Caption: COVER PHOTO: TOM VAN DYKE
As the bulldozers get ready to move in on the green fields of Coyote Valley, those who farmed the land, like Ken Saso, recall an era that has been a long time passing.
[990606 WS 1]
PHOTO: TOM VAN DYKE
Some farmers, such as the Sasos, have held on to their land; developers such as Sobrato Properties have bought up the rest, which they lease to farmers.
[990606 WS 11]
PHOTO: TOM VAN DYKE
Ken Saso and his son Will, 21, work to maintain what's left of the family farm along Monterey Highway.
[990606 WS 10]
PHOTO: TOM VAN DYKE
Will Saso, who is majoring in communications at Santa Clara University, helps run the family's fruit stand on Monterey Highway.
[990606 WS 15]
PHOTO: TOM VAN DYKE
On land that he leases from a developer, Erin Gil farms grass--turf for Silicon Valley lawns.
[990606 WS 14]
PHOTO: TOM VAN DYKE
Top left: The old Grange Hall that served a thriving farm community now sits mostly idle except during the summer jazz festival.
[990606 WS 8]
PHOTO: TOM VAN DYKE
Top center: The Coyote Stage Stop is a landmark on Monterey Highway.
[990606 WS 8]
PHOTO: TOM VAN DYKE
Above: The IBM Research Park in the foreground is a hint of what's to come for Coyote Valley. Cisco Systems plans an office campus in the upper right area of the picture.
[990606 WS 8]

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