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The city also has agreed to reduce its construction tax from 4.5 percent of valuation to 1 percent and to reimburse the company up to $500,000 toward the cost of capital equipment acquired within the first two years to manufacture and perform research and development tasks.
The city estimates that the project will go on the tax roll at $200 million, but Reed said the estimate is probably low and incorporates no projected taxable value for the business equipment that Samsung will have to buy. The property is expected to become subject to real property and business property assessments in the 2016-2017 tax year.
[contextly_sidebar id=”dca046c6ceb18c31d2a1f3c7c2f0e453″]“What we are making happen here, we are facilitating one of our long-term companies staying here and growing here,” Reed said. “They will put hundreds of millions of dollars in investment here. This is a great story of the evolution of Silicon Valley. We want research and development headquarters here.”Other obvious beneficiaries of the additional Samsung workers will be the various apartment developers who own properties in the North San Jose neighborhood and have committed to building some 7,000 apartments more. That includes The Irvine Co., which built the massive North Park apartment complex from 2001 to 2007 with 2,760 units, and Crescent Village, next door, where it will have 1,750 units more. Equity Residential is building 1,000 units in North San Jose, as well. Developers have worried aloud that the new inventory might be too much, too soon.
An estimated 900 construction jobs would be created during the project’s development, according to city records. The anticipated economic impact of the construction is approaching $500 million.
Samsung has secured a site development permit from the city and applied for a demolition permit, Mayor Chuck Reed told the City Council. The company is also working on its building permits. Construction is expected to start by the end of the year.
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