Kylli’s Santa Clara Project a “Fork in the Road” for the City

Yahoo, Silicon Valley Synergy, Bay Area, LeEco, Genzon Investment Group, Santa Clara, Kylli

By Michele Chandler

A proposal by real estate company Kylli, Inc. to build a massive new community in Santa Clara near Levi’s Stadium that would contain thousands of new residences and several office towers could serve as “a fork in the road” for development in the South Bay city.

Kylli is a wholly-owned subsidiary of Genzon Investment Group Co., Ltd., a privately-held company headquartered in Shenzhen, China.

As part of Santa Clara’s early consideration process of a development requiring an amendment to the General Plan, Kylli presented its proposal for the 48.6-acre property—once owned by tech giant Yahoo and then Chinese technology conglomerate LeEco, which promised to build a 3-million-square-foot campus that could house as many as 12,000 employees—to the Santa Clara City Council on January 23rd. Council members gave their unanimous approval to proceed with the official development process. In all, the proposed development would encompass 10.5 million square feet.

Now, Kylli must file a formal application and progress through the established planning and approval process, including community meetings and a final vote by the city council. Community meetings could occur in the third quarter of this year, according to the company’s timeline, with a hearing before the city council on the project’s formal approval possibly happening as early as the first quarter of 2019.

“You’re almost creating, in some aspects, a small city in the Bay Area. It’s an invitation for the city of Santa Clara to enter the world stage as a major metropolis,” said Bob Staedler, principal of development and planning consultancy Silicon Valley Synergy. “It’s all part of what job growth in Bay Area is causing to happen, and we’re going to see more of it, not less.”

The project would require a General Plan amendment for the property to change the area’s zoning from High-Intensity Office/Research to a newly-established mixed-use designation that permits a high-intensity mixture of office, commercial and residential uses, the city said. According to the developer’s estimates, the development could draw about 13,000 residents.

The tallest building could reach 50 stories high, company officials said during last week’s hearing, while residential buildings could be about 35 stories tall.

“Within the next few months, we anticipate that the applicant will formally submit a Planned Development Zoning application. No future community meeting dates have been set,” said Santa Clara associate planner Rebecca Bustos in an email.

Right now, the area consists mainly of paved parking. The site is bordered to the north by Tasman Drive, to the east by Old Ironsides Drive and to the west by Patrick Henry Drive. Several office buildings line property to the south.

Notable locations near the former Yahoo property include Levi’s Stadium, California’s Great America amusement park and the Santa Clara Convention Center.

Six million square feet would be earmarked for residential development of about 6,000 units, while another 3.5 million square feet would be devoted to office space, according to the city’s website. About 600,000 square feet would become retail and community space, while 400,000 square feet of hotel and office amenities has been proposed, along with eight acres of open space.

As for the building heights proposed for the project—some of them substantially above what is currently allowed—Staedler said: “This is a fork in the road for Santa Clara. They’re going to have to decide are they going to be NIMBYs like some cities in the south county, or [if] they want to be a major metropolis.”

Yahoo had received city approvals to develop a 3.06 million-square-foot, 13-building campus. However, the ailing web services provider sold its land and entitlements to Chinese tech firm LeEco in 2016. But LeEco also encountered financial trouble and dropped development plans for the property.

Founded in 2013, Kylli debuted in the Bay Area real estate scene with its acquisition of the former headquarters of Standard Oil, at 225 Bush in San Francisco’s Financial District. In March of 2015, the company purchased the 18-acre waterfront property in Burlingame called Burlingame Point with sights to build a Class A office complex catering to international technology enterprises.

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