After five years, a planning effort for a new growth area in south San Jose has halted because a coalition of developers has ceased funding the effort. Coyote Housing Group, which includes Shapell Homes, Citation Homes and other developers, announced in mid-March that it would suspend funding for work on the Coyote Valley specific plan. The group cited the "extremely complex planning process" and complications with existing industrial entitlements in North Coyote Valley.

"Given these circumstances, there is simply too much uncertainty surrounding the plan and the market to continue as is," said Chris Truebridge, president of Shapell Homes.

"It means that we're done," said Laurel Prevetti, San Jose's assistant planning director. "The city does not have the money to complete the specific plan process."

Coyote Valley is a swath of about 7,000 acres of mostly undeveloped farmland and open space along Highway 101 in South San Jose. The city has already approved 6.6 million square feet of industrial development in North Coyote Valley. The specific plan process was intended to incorporate the development of 25,000 housing units in an integrated community with the industrial job centers. Development of Coyote Valley is controversial with environmentalists, south county interests and some San Jose community activists who fear an emphasis on the area could shift services away from existing neighborhoods.

The planning process started in 2003 and the Coyote Housing Group reported it has spent $17 million on planning. Although the specific plan and an environmental impact report remain incomplete, development of the industrial areas could go forward at any point, according to Prevetti.

Prevetti said the city will use some of the specific plan information and analysis in a comprehensive general plan update, which commenced last year. In addition, work on the Coyote Valley specific plan provided lessons regarding mixed use, urban school siting and parks that can be incorporated into planning other parts of town, she said.