Monday, August 22, 2005

When developers make their big pitch to build subdivisions, a new school is often part of the deal


Builders get educated
When developers make their big pitch to build subdivisions, a new school is often part of the deal

Ilene Lelchuk, Chronicle Staff Writer

Sunday, August 21, 2005

When Nephtali Ricafrente, a U.S. Marine Corps recruiter, was transferred from Oahu to Vallejo, he and his family had bigger concerns than missing the tropical Hawaiian weather.

They wanted to buy a house. And they wanted good schools for their three boys.

Ricafrente and his wife, Sheila, researched test scores, toured resale homes and scouted out new developments. When they found a neighborhood under construction with a new elementary school opening this fall, they were sold.

Early this month, the Ricafrentes moved into a four-bedroom $630,000 house -- one block from the developer-built Canyon Oaks Elementary -- in the Vintage Ranch development in American Canyon.

"Having a really good school and having school close to home is a major factor," Ricafrente said.

In an emerging trend, especially in the rapidly growing Bay Area outposts, developers are erecting schools rather than waiting for the school district to do it.

The theory is that new schools will draw home buyers, raise home values and make the developers some influential friends, such as city planners who grant building permits or community activists who are vocal about population growth.

"As a developer, if you develop a relationship with the community and understand what their needs are, it does set you apart," said Glen Martin, division president of Standard Pacific Homes, which is building the 765-home Vintage Ranch at the south end of Napa Valley. The homes on 5,000-square-foot lots sell for $600,000 to $900,000.

Standard Pacific is paying for half of the $15 million Canyon Oaks Elementary School and has taken over the construction. It's the first new school in the Napa Valley Unified School District in about 30 years.

It would have been easier for Standard Pacific to pay state-mandated developer fees, dedicate some land for a school and then forget about it.

But Martin said that paying fees doesn't guarantee when the district will be able to build a school. And an open field with a "Coming Soon" sign doesn't help sell houses.

In his case, the school district waived the fees so Standard Pacific could move quickly. The district didn't have to wait for state money from developers' fees to trickle back down and didn't have to conduct a public bidding process to find a builder.

For some districts, working directly with the developer not only saves time but could result in more money. Such districts are finding that developer fees and state dollars required by a 1998 law no longer cover skyrocketing building costs, according to Marshall Krupp, a political strategist who helps school districts negotiate with developers. "Wherever you have unprecedented residential growth and land speculation, you'll find higher enrollment for schools and inadequate fees," Krupp said.

Krupp recently convinced a developer in Merced County, Fox Hills Management Group of Redwood City, to pay more than twice the fees that state law requires for the Los Banos Unified School District.

The state has set about $2 per square foot as the standard residential developer fee for financing school construction. Krupp has helped get that up to $8 or $9, which is costing the developer roughly $16,000 to $18,000 for an average 2,000-square-foot suburban house.

"I can show the developers it's in their best interest to have a new school available to their homeowners," he said. "The alternative is busing to overcrowded schools and schools that have to manage with two sessions (early morning and afternoon) in one day."

No one seems able or willing to estimate exactly how much more a home with a new school nearby is worth, except to say a lot. Gary Gibbs, a consultant to builders, said the practice emerged about six years ago, with about one developer-built school a year. Now there are eight to 10 being built across the state.

In fact, counties and school districts are starting to expect them.

In the Bay Area, at least three schools are opening this fall, and more are under construction in San Ramon and Hayward.

East San Ramon's Dougherty Valley, where 11,000 new homes are planned by a team of developers, has the most developer-driven classrooms going up.

That's good news, because enrollment in the 22,000-student San Ramon Valley school district is expected to grow by more than 10 percent in the next five years.

Brookfield Homes, Lennar and Centex, working together as Windemere BLC Land Co., are opening Hidden Hills Elementary and Windemere Ranch Middle School this fall, spending a total of $46 million, said Lennar spokesman Sam Singer. Another elementary and a high school are coming in 2007.

Elaine O'Hanlon will be the middle school's first Parent Teacher Student Association president. Her family doesn't live in one of the new developments but is benefiting from them.

Without this new school 3 miles from her house, her sixth-grade son would have gone to Iron Horse Middle School, which was way over capacity and diverted some students last year to Danville, as much as a 30-minute drive during the morning commute, she said.

"I'm excited about it," O'Hanlon said. "It's important to be close to your school and close to your neighbors."

It's not unusual in the Bay Area for developers to build schools for children who won't be living in the homes they have built.

Stonebrae Elementary, located just outside the gates of the new Stonebrae Country Club in the Hayward hills, is expected to open in 2006 with 350 students, and could eventually accommodate 650. It's doubtful that the golf course community of high-end homes would produce nearly enough children to fill that school.

"We'll be lucky if we generate 150 kids at most," said Steve Miller, chief executive officer of Stonebrae LP, the developer providing more than half the $22 million school construction cost.

So why bother building a school?

Miller said that the promise of a new school to a district that hadn't built one in decades gave his project some publicity and appeal in 1998, when the country club was first proposed at a potentially environmentally sensitive area. (Besides offering the school, the developer has agreed to keep about 1, 000 acres of the 1,600-acre-site as open space.)

Many of these developers are still contributing the usual playgrounds, jogging paths and other amenities that home buyers have come to expect. But new schools are fast becoming an even bigger selling point, not only for buyers but also for neighbors and public officials.

"It helps to have a civic-minded developer who is making more money than they originally thought," said Mark Joseph, American Canyon city manager.

At Vintage Ranch in American Canyon, the Ricafrente children recently got to play on the public playground that is part of their new elementary school.

"They're really excited," their dad said. "They're used to moving around, so starting a new school isn't really a problem. They were going to Napa Junction (elementary school) last year. There were lots of portable classrooms. They'll miss some friends. But it was crowded."


Developer-built schools in the Bay Area

Some of the projects under way:

Canyon Oaks Elementary School: Opens this fall in the Vintage Ranch development (765 homes) by Standard Pacific in American Canyon. It's located on Silver Oak Trail.

Hidden Hills Elementary School: Opens this fall, built by Windemere BLC Land Co. (a partnership of Brookfield Homes, Lennar and Centex), which is building 5,170 homes in east San Ramon's Dougherty Valley. It's located at 12995 Harcourt Way.

Windemere Ranch Middle School: Opens this fall, built by Windemere BLC in San Ramon's Dougherty Valley. It's located at 11611 East Branch Parkway.

San Ramon elementary school: As yet unnamed, this school is scheduled to open in the fall of 2007, built by Windemere BLC in San Ramon's Dougherty Valley. No address available.

Dougherty Valley High School: Scheduled to open fall 2007, built by Windemere BLC and Shapell Industries in San Ramon's Dougherty Valley. It's located at the intersection of Bollinger Canyon Road and Albion Way.

Stonebrae Elementary School: Scheduled to open fall 2006, built by Stonebrae LP, which is building the nearly 600-home Stonebrae Country Club and golf course in the hills of Hayward. Located at Hayward Boulevard and Fairview.

E-mail Ilene Lelchuk at

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