An undeveloped swath of land in South San Jose is poised to become Silicon Valley’s latest “urban village.” The proposal—more than a dozen years in the making—will finally bring retail, industrial space and housing within just a few blocks of a major South San Jose transit hub.
The last piece needed to bring the new Great Oaks Mixed Use Project community to life was finalized in February of this year when Atlanta-based Pulte Homes purchased a 25 acre-portion of that property for $102.8 million from New York-based real estate investment trust iStar Financial Inc.
Pulte, which is behind several other Bay Area projects, is reportedly planning to build up to 419 residences on its Great Oaks land. “We are very excited about the community and anticipate high demand, given its proximity to several businesses and transit in a prime South Bay location,” said Dan Carroll, vice president of land acquisition and land development of Atlanta-based Pulte Group’s Northern California division in an e-mail response.
To assemble those looked good on paper, but, in reality, was almost impossible to do
What is transforming an area on the fringes of San Jose, best known for being where IBM’s old-school disc drives were made back in the mid-1950s? It took a few landowners willing to share a common vision—plus a willingness from the city of San Jose to shape the area to better serve present-day Silicon Valley needs.
Changing the zoning of the IBM land was a major catalyst to creating the current Great Oaks urban village, which is roughly bounded by Highway 85, Great Oaks Parkway and Cottle Road.
The property is one of a few areas that San Jose regulators converted from industrial-commercial zoning to allow residential uses. That’s a major change outlined in San Jose’s Urban Village Plans, which aims to make walkable new communities with offices, residences and services that are close to transit.
San Jose has targeted various areas for these kinds of urban village development, said Edward Storm, board chairman of Hunter Properties, the parent company of Cupertino-based developer Hunter Storm. However, those projects didn’t always end up becoming a reality, since multiple property owners tended to be involved and complicated development plans.
“To assemble those looked good on paper, but, in reality, was almost impossible to do,” Hunter said.
Great Oaks was different. With just three major landowners, Storm said, it was possible to achieve “a common goal. That’s why this particular one worked out.”
Job growth, freeway congestion and rising housing demand also drove San Jose’s effort to build “dense urban villages,” according to an analysis of the development that was recently published by the Urban Land Institute.
The Great Oaks housing-retail-office development is located near three transit stops—the Blossom Hill Caltrain Station and the Santa Clara Valley Transportation Authority’s Cottle and Santa Teresa light-rail stations.
The Pulte deal is the latest in a string of milestones that brought retail and apartments to one-time vacant property on the former IBM disk drive factory campus.
It was 2013 when San Jose began championing its vision for the area, located in Edenvale and adjacent to the former 332-acre IBM disk drive campus on the city’s outskirts.
In 2014, developer Hunter Storm entitled iStar’s property for 418 single-family homes and 301 multifamily units. That zoning change also ushered in a Costco store, other retail locations and parks.
The west side of the campus has been sold off to HGST, a subsidiary of Western Digital Corp that has been modernizing its property. (Western Digital bought San Jose-based Hitachi Global Storage Technologies for $4.3 billion in 2012 and renamed it HGST. Hitachi had acquired the site from IBM in 2002.)
In 2015, Redwood City-based data center firm Equinix opened its first building on the site and is in the process of building a second building on the 11.15-acre property, which it bought from iStar.
New apartments will also be going up, now that Fairfield Residential has taken out a ground lease on one portion of the iStar site. So, when Pulte completed its purchase in February, that brought the final component to the development—single family homes.
The recently-sold land is already entitled for housing, said Storm. “All they have left to get is building permits, and that usually is the simpler part of the formula. All the political decisions and the CEQA issues and all that are behind us.”
In the Bay Area, Pulte has 14 active communities. They are broadly represented in the region, from Walnut Creek to San Mateo to Santa Clara, Fremont and Milpitas.