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County challenges environmental report on affordable housing site in Portola Valley

County officials are challenging an environmental report on a site where Portola Valley planned to locate housing that would be affordable to people of moderate incomes. The challenge may postpone the town's affordable housing plan.

In a letter dated Nov. 6, officials of San Mateo County's Groundwater Protection Program fault Berkeley consulting firm Stellar Environmental Solutions on its analysis of soil contamination at 900 Portola Road, a 1.68-acre former plant nursery site that the town is planning to buy. Stellar, officials wrote, failed on several points, including adequately evaluating the lateral extent of pesticide contamination and failing to prove that contaminated soil had not migrated toward Sausal Creek.

The letter also lays out a list of further data-gathering tasks for Stellar and sets a deadline for a work plan of May 13, 2013. The site cannot be sold without the county officially acknowledging, by letter, a successful remediation of the contamination.

"At this time, Town staff does not have enough information to determine the severity of this issue but the County's letter will certainly have an impact on the timing of the town's purchase of 900 Portola Road," Mayor Maryann Moise Derwin wrote in a Nov. 15 letter to the town. "As more information becomes available, the Town will provide timely updates to keep you informed."

The Town Council at its Nov. 14 meeting agreed to hold a wide-ranging public hearing on this project on Wednesday, Dec. 12, probably one of many to come, remarked Councilman Ted Driscoll.

The transaction is at the center of an intense controversy in this upscale town over planning for construction of housing for people with moderate incomes, as required by state mandates.

Particularly irked are neighbors of the nursery site who complain that the density of the proposed housing would create an "urban setting" that would lower their property values. The neighbors say they do not oppose affordable housing, but claim that the process has not been "democratic and open."

The council signed a purchase agreement for the site in August, but the transaction is contingent on two factors: remediation of the contamination and the sale of two parcels in the Blue Oaks neighborhood -- all before the escrow closing date of Dec. 21.

On Saturday, Nov. 17, the town announced that it had found a buyer for the Blue Oaks parcels at a price of $2.88 million.

But the town could now face a steeper climb. The agreement for 900 Portola Road specifies a purchase price of $2.6 million for the site, with an additional payment of not more than $400,000 to address soil contamination.

Officials have said that the town would augment the Blue Oaks proceeds, if necessary, with donations and/or reserves from the town's Inclusionary Housing Fund, which has an estimated balance of $158,000, according to the 2012-13 budget. (Subdivision developers replenish this fund with fee revenues that must be used for affordable housing.)

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