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[whitespace] Trading Places

Los Gatos--The villain in the year-long saga over development on 1,100 acres of forested land above Lexington Reservoir just may turn out to be the hero. John Musumeci, land manager for Arlie Land and Cattle Company, appears to have traded his black hat, under which he wriggled around zoning laws and sued local groups, for a crisp new green one. Late last week, he offered 200 acres to preservationists for $5 million--a relative bargain. The catch? If he isn't allowed to develop 54 lots, the deal is off.

"This is the best possible solution for preserving the area," Malcom Smith, of the Midpeninsula Regional Open Space District, says. The deal, which was brokered between the agency and Arlie Land and Cattle over the last few months, puts environmentalists in the awkward position of endorsing a major development in order to save 1,000 acres of forest.

"We took the best alternative," Smith says, citing the increasing pressures for development and rising price of land in the valley. "We were choosing between some development and a lot of development."

Under the proposal, which still needs to be approved by the agency's board, Midpeninsula will pay $5 million for the lower 210 acres of the property.

This is still far from a done deal, however. Pete Denevi, a local developer, wants to build a golf course and country club on the same land that Musumeci wants to sell to the agency. Denevi has maintained an option to purchase the lower 210 acres since before Arlie purchased the property. Musumeci has twice tried and failed to terminate Denevi's option. Now Denevi says that Musumeci is in violation of their agreement and must sell the property to him, not Midpeninsula.

Outraged that the agency is using public money to foul his golf course deal, Denevi is taking both Musumeci and the Open Space District to court to clarify who has rights to the property--a battle he feels he will win. "We have had this agreement for a long time," Denevi says.

Musumeci insists that the land is his to develop. And he says as long as he is allowed to sell 55 lots on the property, which lies south of Bear Creek Road, Arlie will give the remaining 800 acres to the agency as a gift.

If he cannot get the permits, then the deal is off.

"This is a perfect situation for everyone involved," says newly born eco-philanthropist Musumeci. Since Arlie took over the property in late 1997, the company has angered environmentalists by using 100-year-old records to gain more lots on the property and aggressively pursuing sales of individual lots. Musumeci also sued the Greenbelt Alliance, one of the groups opposed to development.

Arlie paid $17.4 million for the 1,100 acre property. Though nothing has yet been developed, Arlie advertised lots at $750,000 apiece--a potential profit of $46.2 million, including the money from Midpeninsula.

Musumeci now says he believes there is even more money to be made. He estimates that fewer lots, which will be clustered in the middle of a nature preserve, will be worth substantially more than $750,000 a piece.

In an interview Tuesday, Denevi said he is open to allowing some portion of his property to be used as a nature preserve. He just does not want to get cut out of the development.

But Musumeci says that the deal with the Midpeninsula agency is as good as done. "It is outrageous that Denevi would try to take away the open space that the community has wanted for decades," says Musumeci, allowing himself a little self-righteous latitude in his new role as eco-defender. "Denevi will be dispensed with in due course."
Jim Rendon

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Web extra to the October 8-14, 1998 issue of Metro.

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