Grosvenor pitches next step at 800-home development in Los Gatos

Grosvenor Property Americas has moved forward with a second phase to add 437 homes to its controversial North 40 development in Los Gatos.

The U.S. unit of London-based Grosvenor, owned for 346 years by the Duke of Westminster, has filed preliminary plans to build the project at the corner of highways 17 and 85, the San Jose Mercury News reported.

Plans call for 119 townhomes and 250 apartments, plus 14,900 square feet for shops and restaurants, 4,300 square feet for community use and a 2-acre public park. Some 88 units would be affordable, including 68 units built by Eden Housing on 1.7 acres of donated land.

If approved, both phases of the North 40 development — bounded by highways 17 and 85, Los Gatos Boulevard and Lark Avenue — would include more than 800 homes, of which 117 would be affordable. 

The project’s 2-acre central park, which was initially to be private, will now be open to the public. Grosvenor changed it after several residents said they wanted a public gathering space.

Grosvenor Property submitted its preliminary application under Senate Bill 330, a state housing law that prevents cities from changing zoning laws to block high-density apartment buildings. It  has until Oct. 15 to formally apply for the project.

Los Gatos must find room for 1,993 homes in the next eight years to meet its state-mandated housing goal. Of those, 310 units must be affordable for low income households.

Phase one of the North 40, at the northwest corner of Los Gatos Boulevard and Lark Avenue, is now under construction. It includes 253 market-rate units at a townhome complex called Bellaterra and 49 affordable units for seniors at a complex dubbed Walnut Grove, plus a market hall with restaurants and shops. 

Half of the homes at Bellaterra have already been purchased, according to the developer, with the project expected to be finished next year. Prices range from $900,000 to $2.3 million.

Residents started moving into Walnut Grove earlier this year. More than 340 people were on the waiting list for the 49 units, and residents were selected through a random lottery. Ten units rented for $948 a month, and 39 units were listed at $1,580 a month.

The North 40 project, 30 years in the making, was fought by residents who don’t want high-density housing. 

Grosvenor’s initial plans were rejected by the Town Council, which said the housing density was too high and didn’t include enough affordable units. The developers sued the town and won, pushing the development forward.

Last May, the British investor bought a commercial building on a nearly 1-acre lot approved for redevelopment into 225 apartments at 2600 Telegraph Avenue in Oakland. In July, it won approval to build a 163-unit apartment building at 1951 Shattuck Avenue in Berkeley.

In August 2021, Grosvenor bought a tech campus with three buildings in North San Jose for $108.5 million in an all-cash deal.

— Dana Bartholomew