The million-dollar house on the hill
Publication Date: Wednesday Nov 16, 1994

The million-dollar house on the hill

This estate has six bedrooms, a pool and a golden view of the Bay Area. So why is the city on the verge of tearing it down?

by Peter Gauvin

John Marthens Lane is a narrow, one-lane road that climbs up the hill from Arastradero Road a short distance from the Alpine Inn, the historic beer and burger joint more commonly known as Rossotti's. Follow the lane up a small canyon, past a few country estates, and the pavement ends at a wooden gate.

Beyond the gate is Arastradero Preserve, a 609-acre expanse of golden foothills owned by the city of Palo Alto. Except for Stanford's Coyote Hill Preserve, it is the closest publicly accessible open space in the foothills to Palo Alto.

Past the locked wooden gate, a gravel road winds farther up the hill to the left, toward the bay. It ends on top of this knoll at "Casa Maximo Martinez"--a sprawling ranch home with six bedrooms, five bathrooms, a walk-in freezer, cavernous hallways, a huge living room with a fireplace, a large dining room with bay windows and a swimming pool. The property is commonly known as the Arastra house, and like the rest of the preserve, it is owned by the city of Palo Alto.

Few would argue that this isolated, 5,700-square-foot estate is a coveted item and would be worth well into the seven figures on the Peninsula's real estate market.

Others have argued that the estate has greater potential for community benefit through such uses as a youth hostel, a conference center, an interpretive center or even a base for programs such as the Challenge Learning Center, which is designed to develop team building and self-worth through outdoor experiences.

So after all of this, why is the city of Palo Alto on the verge of spending $90,000 of public money to tear the estate down?

The answer is not simple and involves 10 years of community meetings, lawsuits, and court settlements. It also involves a questionable decision by a judge to require an environmental impact report for virtually any use of this single-family house, and a commitment on the part of the City Council not to spend any money on improving the house or the narrow, winding John Marthens Lane.

The result has been frustration and disappointment for anyone other than the John Marthens Lane residents located at least a quarter-mile away who have blocked most of the proposed uses of the building.

Finally, after years of such neighbor opposition, environmental hang-ups, and indecision, the City Council last month threw up its hands and voted 5-4 to tear the house down.

But even that did not put an end to it.

The Council was one 'aye' shy of the six votes it needed to allocate the funds to tear down the building this year. The Council now must wait until next year's budget when it can vote again on spending the $90,000 on demolishing the building.

This is an issue that refuses to die, and refuses to please anyone.

"I really find it disturbing that a use for this property cannot be found because of the threat of litigation from neighbors," said Council member Ron Andersen, who was joined by Mayor Liz Kniss, Vice Mayor Joe Simitian and Council member Dick Rosenbaum in opposing the demolition. "This is not the time to capitulate."

The Council had voted on demolishing the main house as well as a smaller stablemaster's house down the hill. All that would be kept is an enormous brown barn once used as a horse stable, to use as storage for the city's Open Space and Sciences Division.

The single missing vote effectively extended the life of the house another eight months or so. During that time city officials say they will keep their ears open for any last-gasp efforts to find a compatible use for the house.

Tearing it down would be a waste, many feel.

"It's not like we're knocking down a cracker box. This is a fine house," said Mayor Liz Kniss. "I still cannot imagine knocking down a million-dollar asset because we can't come up with any creative solutions to put it to use."

From the house's perch in the upper portion of the preserve, one can look to the southeast, across the ravine where Arastradero Creek trickles, and see the green fairways of the Palo Alto Hills Golf and Country Club and some posh foothill residences. Higher up and farther to the west is Los Trancos Road and computer pioneer Bill Hewlett's subdivision. To the south, the preserve abuts Foothills Park. To the east, tremendous views of the urbanized Peninsula and San Francisco Bay grab the eye. It is here that Jim Kellerman, the caretaker of the house, has lived, rent-free, for the last seven years.

"It's a pretty special place, very tranquil," says Kellerman, whose main company is the wildlife that uses the murky pool as a watering hole and the garden's shrubs for snacking. The deer are omnipresent, he says, but he also sees opossums, coyotes and an occasional bobcat. Sometimes he finds the creatures closer than he would like.

"I've found a tarantula in my bed and a rattlesnake in the hallway," he said. "The tarantulas seem to migrate through the house in October."

But despite its occasional uninvited guests, Kellerman says the house has great potential for some sort of creative public use, from a hike-in day camp and environmental interpretive center to a tree nursery for Palo Alto reforestation.

"It's a unique situation," says Kellerman, a landscape designer by trade. "How many places have an existing large house that is structurally sound and sit in a 600-acre preserve?"

Kellerman believes the house was built in 1948 by John Marthens. He and his family lived there until early to mid-1960s before he sold the property to developers with plans to build approximately 500 one-acre homes on the low, rolling hills. The development proposal was subsequently tied up in court by the city for 14 years.

The city acknowledges that the house is not in good shape and is in need of roughly $150,000 worth of repairs to the septic system, water lines and two fireplaces. No major remodeling has been done since the house was built, except for the composition roof that was replaced about 10 years ago. To the casual observer, the house looks to be suffering from a bit of neglect, but it is in surprisingly good condition overall.

The name "Casa Maximo Martinez" originates from California's days of Mexican rule. In 1833, Gov. Jose Figueroa granted 3,500 acres of foothills known as Rancho Corte de Madera--including such lands as Stanford's Jasper Ridge, Searsville Lake, Westridge, Ladera and Alpine Hills--to Domingo Peralta and Maximo Martinez. Martinez bought out Peralta and enlarged the rancho to approximately 20,000 acres.

According to Kellerman, Martinez named the portion of the acreage in the vicinity of Arastradero Preserve "Rancho del Cielo"--Ranch of the Sky. The "Casa Maximo Martinez" sign has been there since he moved in, but no one seemed to know when or from whom the house got its name.

Palo Altans can thank a lawsuit filed against the city for the acquisition of Arastradero Preserve. In order to defend its lands west of Interstate 280 from excessive development, Palo Alto launched a two-year Foothills Environmental Design Study in the early 1970s, which resulted in the city downzoning the foothills to a minimum lot size of 10 acres.

Property owners viewed it as a land grab and numerous lawsuits ensued, most of which the city won. An exception was Arastra Ltd.'s (formerly Sunset Oil Company's) suit over 512 acres it planned to develop in the lower foothills. A court order forced the city to buy the land for $7.5 million in 1976 to settle the case. The city kept it fenced off and closed to the public while it decided what to do with the area.

For years it was thought that the house, with its generous size and its location in a nature preserve laced with hiking trails, made it an ideal site for a youth hostel.

In early 1984, the Arastra Citizen's Advisory Committee, charged with creating a master plan for the preserve, recommended that the house and one acre of land around it be set aside for a youth hostel.

A youth hostel would be a "unique opportunity for Palo Alto to provide inexpensive lodging for travelers and a community meeting place for retreats, workshops, classes and youth groups," the committee said. The plan was to provide beds for 25 to 30 overnighters and four live-in staff. The plan was sailing along until the foothills erupted in flames on July 1, 1985. An arson-set fire near Page Mill and Arastradero roads destroyed 15 homes, four in Palo Alto and 11 in Los Altos Hills, and burned 150 acres. It was Palo Alto's worst fire ever.

In addition to the $9 million in damages the fire caused, it sparked fresh controversy over the hostel. Neighbors of the property went to the City Council to express concerns that hostel guests would not only add traffic problems to John Marthens Lane, but also might increase the chances of another fire in the dry foothills. The Council responded by modifying its year-old lease option with American Youth Hostels to allow a maximum of 20 car trips per day in and out of the youth hostel.

In September 1987, despite threats of a lawsuit, the City Council gave its final approval for the hostel and agreed to a $1-a-year lease with the Golden Gate Council of American Youth Hostels, the organization's San Francisco chapter.

Despite appeals from John Marthens neighbors, the city decided not to require an environmental impact report. The prevailing opinion was that the California Environmental Quality Act, which requires EIRs, was really intended to ensure protection from large, new housing or commercial developments, not a change of use to an existing, single-family residence.

But lawyers representing residents balked. The residents, which included then-Hewlett-Packard CEO John Young and Robert Bass, a Texas billionaire with interests in an oil company which owns property adjacent to the site, claimed the youth hostel would create too much traffic on John Marthens Lane and disrupt their quiet neighborhood with noise, congestion and the possibility of accidental fires.

"It amounts to a 35-bed hotel in an undeveloped area," said Karl Geier, a Walnut Creek attorney representing several of the residents, at the 1987 Council meeting where the youth hostel got its go ahead. "We think a youth hostel is a good use--somewhere else."

John Marthens Lane residents declined to be interviewed as part of this story. The Oakland-based Miller, Starr & Regalia Law Corp., which is representing several of the residents, did not return phone calls.

Meanwhile, American Youth Hostel officials said they had "bent over backward" to accommodate the concerns of neighbors. They agreed to limit traffic to 20 trips per day, contribute $13,500 to improve the road and indemnify the city and residents for any accidents on the road. The city had agreed to contribute $14,500 to improve the road.

Jeffrey Shopoff, attorney for AYH, accused the neighbors of hysteria at the September 1987 Council meeting. "In the main, they're just uninformed," he said. "They have visions of unwashed hordes jumping over their fences and into their yards, starting fires."

But the concessions were not enough and the neighbors sued, seeking a court judgment requiring an environmental impact report.

And in March 1988, they got their wish. Santa Clara County Superior Court Judge James Stewart ruled in their favor, requiring an EIR before the project could go forward. At the time, it was believed to be one of the first EIRs ever required for the change of use for a single-family residence in Santa Clara County.

Although the judge only required that the neighbors' concerns be addressed in an EIR and did not address the merits of their complaints themselves, the damage had been done. Neither AYH nor the city, which was faced with a $3.7 million General Fund budget shortfall at the time, was willing to cover the expense of an EIR, estimated by AYH at the time to be about $50,000.

Nearly a year later a state court of appeals upheld the ruling. That was the last straw. AYH backed out and the youth hostel plan was dead.

But the neighbors were not satisfied. They wanted to kill the youth hostel item. Finally at the end of a costly settlement process that was not completed until 1992, the neighbors had a signed agreement from American Youth Hostels, Inc. that it would never open a youth hostel on the preserve. They also gained more control over use of the road, although that issue is still debated.

"This house doesn't know much besides lawsuits," said Kellerman. He said he moved there in 1987 expecting to only be there six months while improvements were made to get it ready for the youth hostel. It's almost 1995, and he's still there.

After the settlement was completed two years ago, the city still found itself the owner of a six-bedroom home it didn't know what to do with.

At the time the Challenge Learning Center had already come forward proposing to use both houses and the barn for a day camp and ropes course for team building and confidence training, with clientele ranging from businesses to disabled children.

That proposal came before the City Council last year. But once again the neighbors voiced their opposition.

Fearing court costs and controversy, the organization's board of directors withdrew its proposal in June of last year. The "extremely hostile" response, said Board President Jim Bronson, forced the decision.

Despite the Learning Center's assurances that ordinary access for its participants (10 to 25 people per day) would be on foot up a trail from Arastradero Road, totally bypassing John Marthens Lane, the neighbors of the preserve opposed the Learning Center with the same arguments they had opposed the youth hostel.

The Learning Center said its programs would result in only 20 additional daily vehicle trips on the road. But the neighbors argued that there was no guarantee that the additional trips would be limited to 20.

"The proposed uses by CLC would constitute unreasonable overburdening of the roadway," said Robert and Betty Jo Davis in a letter to City Hall. Their home, Nickering Knolls, is at the end of John Marthens Lane just before the gate to the preserve.

At a meeting with residents to inform them about the project, Bronson said three residents showed up. "(They) made it very clear that over their dead bodies would anything go in there. We spent a whole lot of time trying to bridge the gap. Their response was to hire a lawyer. There was absolutely no room for even discussion," Bronson said.

After CLC's proposal was squashed, the City Council began looking at other options. The Council twice rejected staff's recommendation to demolish the house, sending it back to committee for more discussion.

One option the Council considered was subdividing the 10 acres of land surrounding the house and selling it to raise money to benefit the community in some other fashion. The problem is the house is on dedicated parkland, which would require going to the voters to undedicate it first.

"Removing 10 acres surrounded on all sides by open space parkland is not a popular idea," said Bill Fellman, the city's real property administrator.

Finding a use for the house has always been a Catch-22, he said.

"The park dedication and the limited use of John Marthens Lane work against each other. If you use the property to the maximum there's too much traffic coming up John Marthens Lane, and if you use it only a little it doesn't justify keeping such a big house."

"The youth hostel was the perfect use because it would be dedicated to the public and anyone could come up and use the entire facility," he said.

It's not the house's limitations that have prevented its use. By most accounts, the house has a great deal of potential for some sort of public use. The main obstacle has been John Marthens Lane. The neighbors and their attorneys maintain that the road is not a dedicated public street, but merely a generous driveway, now co-owned by the city and five property owners with easements along the road. It is narrow, has steep drop-offs in turns, and poor visibility, they say, and does not meet city or county standards.

A 1986 city staff report concluded that $375,000 in improvements would be required to upgrade it for maximum safety. However, the same report concluded that it would cost as little as $28,000 for minor road improvements, warning signs and tree trimming on the lane, which would allow for the operation of a youth hostel.

Some officials believe the city has rolled over too easily when pushed by the neighbors.

"It's a valuable resource. We ought to be prepared to do an EIR and face any legal challenges from the neighbors," said Simitian, one of the four Council members who opposed demolishing the house. "I think it would make a marvelous retreat or conference center.

"The threat of lawsuits from the neighbors has deterred city staff and others from finding a use for the site," Simitian said. "(But) no one ever said that the site was unusable and the road couldn't bear a bigger burden. The road is fine. It's not suited for high speed or high volume," but otherwise it could certainly handle a few extra vehicles a day.

Rusty and Ed VanBronkhorst, who live just above the preserve's boundary, have actively fought any use of the house that would increase traffic.

"To use it for any kind of use they've got to improve that road," said Rusty VanBronkhorst. "Our primary concern is of safety for ourselves and any people using that house," she said.

The 1985 fire demonstrated the insufficient fire access available to the site, she said. Firefighters had trouble getting equipment in and out of the preserve, while horse owners had problems evacuating their animals out the road from the stables that were then at the barn.

"It was intended as a single-family dwelling," VanBronkhorst said. "From a safety and liability standpoint it would be foolish to use it for anything more unless they fix the road."

Kniss believes the residents wouldn't agree to even a few trips a day on John Marthens Lane. "I think the neighbors don't want any traffic on that road," she said.

One possibility might be finding a use for the house that would allow access almost exclusively by foot. But that's unlikely because the preserve's parking lot at the east end of Arastradero Road is about a 25- to 30-minute hike uphill to the house, Kellerman said. Otherwise the only alternative to John Marthens Lane is building another access road through the preserve.

Two alternative routes have been given brief consideration: restructuring the Corte Madera Pump Station Road or improving an existing fire trail that climbs right up the middle of the preserve. But both were considered to be too expensive, upward of $300,000, and inconsistent with the low-impact ethic of the preserve.

After all of this, is there still a chance for a workable idea to come along before the house succumbs to the wrecking ball?

"I'm hopeful," Simitian said, "but not optimistic."

Kniss said she believes there are possibilities that haven't been unearthed yet. And she said maybe it's time for the city to stand up to the neighbors and consider spending the money for an EIR that it wasn't willing to in 1987.

"I really think the need for an EIR should be explored again," she said. "We've all been intimidated somewhat by the neighbors. This is a group that is really determined to stop whatever might go in there."

Kellerman, who's found a temporary home at Casa Maximo Martinez for seven years, hopes others will be able to enjoy its charms as he has.

"I'd be really disappointed if they can't find some public use for it and tear it down," he said. "This is its last straw. I hope someone can pull a rabbit out of a hat."



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