LOS ANGELES - The city of San Jose, Calif. and the Santa Clara Unified School District may soon have 81 acres of land that once housed a state mental institution to use for schools and park development.

California's Department of General Services, which owns the land, has conditionally selected the city and district to jointly purchase the property, located in North San Jose.

"The selection of our joint bid by the Department of General Services for the future acquisition of the Agnews property is good news," San Jose Mayor Chuck Reed said in a statement. "This property is an ideal location for a new school and regional park, and is crucial to meeting the educational and recreational needs of our community."

The property would be split between San Jose and SCUSD, with around 21.6 acres for the city to develop a regional park and 59.4 acres for the district to develop schools.

The district plans to build an elementary, middle and high school—with a possible combination of the elementary and middle school into a K-8 campus, according to Jennifer Alcazar Dericco, public information officer for SCUSD.

The school district said it would fund a large portion of the property purchase price with proceeds of bonds passed in Measure H, an $81.1 million general obligation bond passed in November 2010, according to Larry Adams, director of school bond projects at the school district. One item in the Measure H bond projects list is to "acquire sites for new schools."

The district has been in need of land to develop schools as enrollment projections for the next ten years are expected to exceed the capacity of current schools, she said. The majority of growth is expected to come from communities north of Highway 101—the area that the proposed schools will serve.

"That property is one of the last large parcels of land residing within our school district north of Highway 101, so it's really one of our last options," Dericco said. "So we're really glad that this seems to be moving forward in a positive direction for us to acquire that land."

The Agnews center, which was established by the California Legislature in 1885 as a facility for the care of mentally ill, was closed in 2009.

The 81 valuable acres of Silicon Valley land are surrounded by companies such as Cisco, Paypal, Oracle, and Brocade.

"It's the headquarters of one of the largest concentrations of technology companies in the world," said Julie Edmonds-Mares, director of parks, recreation, and neighborhood services for San Jose. "So there's a lot of growth and employment in the area, and we have a great need for a public asset there."

San Jose's city council has created a North San Jose Development Policy which provides for additional growth and capacity in the area of up to 26.7 million additional square feet of office, research, and development, Edmonds-Mares said.

She added that there have been estimates of up to 88,000 new jobs in the area, and 32,000 planned units of new residential housing.

"It's a livable area for future residents and employees and that's what this is all about—creating dynamic spaces for them," Edmonds-Mares said.

Santa Clara Unified Superintendent Stanley Rose said in a statement following the announcement that the decision is cause for celebration—but measured celebration.

"This is the first hurdle, by far the biggest hurdle," he said. "But we've got a few more to get over before the big celebration can begin."

The next step will be to start negotiations with the school district and San Jose, according to Michael Liang, assistant deputy director at DGS. The three parties will have 90 days to come up with mutually acceptable terms and conditions and finalize the agreement.

The purchase price of the property has not been disclosed, as it is still being negotiated.

Prior news reports have said previous offers on the land were around $76 million, but were rejected by the state.

Once the sale is finalized, Edmonds-Mares said the city will use funds from construction and conveyance tax and parkland dedication ordinance fees to finance the land acquisition.

Once the land is acquired, the city plans to develop a regional park, which could accommodate soccer fields, tennis courts, basketball courts, picnic facilities, and playgrounds. Where the funds come from for such development will be decided as the process moves forward.

The school district cannot move forward with the beginning stages of the projects, including drafting the architectural drawings and going through the permit approval process, until it has acquired the land. It has, however, already received approval from the Department of Education to use the property to build schools.

The school construction process, which will include removing the current buildings on the property, would probably take around five years, Dericco said.

Funding for the construction and development of schools has not yet been determined, but the district's Board of Trustees is looking at possibly pursuing new bond measures as early as this year.

"We've had success with bonds in the past and it really is a testament to a strong community," Dericco said. "We're looking forward to moving forward with the project with San Jose and feel positive about a successful conclusion and negotiations with the DGS."

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