Google Seeks a Strong Foothold in San Jose’s Downtown

Google, San Jose, Silicon Valley, Bay Area, Trammel Crow, commercial real estate office campus Googleplex Diridon Station

Google, San Jose, Silicon Valley, Bay Area, Trammel Crow, commercial real estate office campus Googleplex Diridon Station

By Jacob Bourne

Google’s interest in transforming an integral part of Downtown San Jose received an initial green light by City Council at a June 20 hearing. Council authorized the City to execute an Exclusive Development Agreement, allowing conversations between Google and the City to commence regarding the company’s possible purchase and development of City-owned property in and around Diridon Station. Google will be working with its development partner, Trammel Crow, to potentially build transit-oriented office, retail, mixed-use and R&D development on land within the confines of the Diridon Station Area’s 240 acres.

“This is really a once in a century opportunity for transformative potential in the Diridon Station Area that really comes from the combination of significant transit investment and significant development potential,” said Kim Walesh, San Jose’s deputy city manager. “If all goes according to plan, 10 years from now we will have dramatically improved transit access in Diridon Station and therefore Downtown San Jose. It will become the most transit rich location in the Bay Area, in California and likely in the western United States.”

The ENA marked the most initial stage in the planning of such transformation, to be followed by a year of negotiations culminating in a Memorandum of Understanding. While the project itself has yet to be defined, it won’t be an insular campus solely for Google employees, but rather an integrated development that’s interwoven with all of Downtown San Jose’s many uses. During the Council hearing, City staff referred to Google as “the organizing principle” that can help San Jose realize its collective dream for enhancing Diridon Station.

“South Bay has been Google’s home for over 20 years, we literally have thousands of Googlers as residents of San Jose,” commented Mark Golan, vice president of real estate and workplace services, Google. “So this is a matter that’s pretty important to us. Google shares the City’s vision for the development of the Diridon Area and we look forward to having robust conversations with the City, the County, local residents and community organizations.”

Speaking on behalf of the company’s leadership, Golan said that they’re excited about the possibility of bringing state-of-the art office, housing, retail, amenities, civic plazas, parks and open space to Downtown San Jose. Beginning late last year, Google and Trammel Crow had already begun acquiring property in the Diridon Area. So far, preliminary discussions from a March 30 study session suggest that the scope of the project could include six to eight million square feet of office, R&D, retail and amenities.

“The project will facilitate quite a number of benefits,” explained Nancy Klein, assistant director of economic development and director of real estate for the City. “We’ll have more local jobs closer to home and that is such a pivotal issue for San Jose. We are also looking for those jobs that are here to really benefit businesses and small businesses in and around the Downtown; that will give a real boost, not only to the city but also to those business owners and workers.”

The project could also bring a significant amount of revenue to the City, support the growth of the existing transit hub and serve as a catalyst for additional development projects in the Downtown area. However, from the City’s perspective, job growth is the premier benefit given San Jose’s chronic imbalance between jobs and housing. Data presented by City staff showed San Jose’s jobs per employed resident ratio at 0.85 versus Palo Alto, which has a ratio of 2.9. It was also suggested that the imbalance could be worsening.

A number of residents and representatives from community and labor organizations attended the hearing and largely expressed support for the authorization of the ENA, but many admonished the City to ensure that any development agreement should protect the community by including stipulations for affordable housing and jobs that pay a livable wage. A representative from SPUR was in attendance to express the organization’s support for the agreement with Google, stating that it could aid San Jose in achieving its existing plans to transform the Diridon Station Area.

“What’s built at Diridon has to be unlike anything we’ve ever built here,” advised Laura Tolkoff, San Jose policy director, SPUR. “We have to maximize space for people and create a place where it’s possible and preferable to walk to daily needs and create a place that inspires civic pride.”

According to Klein, the potential project will be subject to the same requirements as other projects. Depending on the outcome of negotiations, a project description and environmental review document are expected in the future. It’s also likely that the project will propel an amendment to the Diridon Station Area Plan as well as zoning changes. Given the transformative nature of Google’s endeavor, substantial community engagement will be an integral part of the planning process.

West Coast Commercial Real Estate News