377,000 SQFT Data Center Coming to Cilker Site in San Jose

San Jose, Planning Commission, Microsoft Corporation, Cilker Orchards Management Group, Silicon Valley

By Michele Chandler

The San Jose Planning Commission has given the green light to a development proposal made by Redmond-based Microsoft Corporation for what is now mostly empty San Jose farmland near Coyote Creek at 1657 Alviso-Milpitas Road.

The Planning Commission approved the tech giant’s proposal for the land, located on the corner of State Route 237 and Coyote Creek Trail, at a meeting on Oct. 24.

Zoning changes were approved to allow construction of six buildings for a data center use totaling approximately 376,519 square feet with associated site improvements and 14 generators, as was a Development Exception to allow a reduction in off-street parking.

Several modifications were approved, including allocating up to $100,000 for appropriate traffic calming improvements in Alviso from the $350,000 contribution by Microsoft towards land acquisition and design of a water well. A status report must be submitted to the City Council by the end of the year outlining the location and construction schedule for the water well to serve the Microsoft development, according to city documents.

The tech firm acquired the Cilker Family 64.5-acre lot earlier this month. The company paid $73.2 million for the property. Microsoft had been listed as the billing applicant on the proposal to redevelop the project.

The area is roughly bounded by Alviso-Milpitas Road to the south, Coyote Creek Trail to the east, McCarthy Lane to the north and Zanker Road to the west. Right now, the site is mostly fallow farmland with some farming structures and three residences. The property’s former owner, Cilker Orchards Management Group, had submitted a development application to the City of San Jose to potentially construct light industrial and data center facilities on the site.

“We continuously explore opportunities to meet the needs of a future based on cloud computing and internet services, so we’re thrilled to find a great one in the heart of Silicon Valley,” Christian Belady, general manager of Microsoft Cloud Infrastructure and Operations, referring to Microsoft’s north San Jose land purchase, told the San Jose Mercury News in an earlier report.

Christian Belady, a general manager for Microsoft Cloud Infrastructure and Operations, said in a statement that the company sees the San Jose property as an opportunity to “meet the needs of a future based on cloud computing and Internet services,” according to media reports.

The company has a corporate presence in other parts of the Bay Area including Mountain View, where it employs nearly 1,700 people.

The property is surrounded by a mix of office, industrial and commercial uses in other directions, as well as some vacant parcels.

Microsoft joins other tech companies looking to operate in San Jose, bringing well-paying jobs with them. Alphabet-owned Google entered negotiations with the city this summer over 22 acres of largely undeveloped land near Diridon Station. In 2016, Apple received approval from the city to develop up to 4.15 million square feet of office space over 15 years in North San Jose.

Cilker Orchards is a longstanding, family owned commercial real estate developer and property manager with deep roots in the local community. Cilker Orchards was originally founded in 1965 as an agricultural company and is the sole initiator of the present development proposal.

Phil Mahoney, vice chairman of corporate institutional sales, and John Yandle, executive vice president, who work out of Newmark Cornish & Carey’s Santa Clara office worked on the sale.

West Coast Commercial Real Estate News