By Nathan Donato-Weinstein
Take a look at Amazon’s wish list for locating “HQ2” – its second headquarters – and it’s clear that San Jose checks the boxes:
A welcoming business climate? Got that. Highly educated workforce? In spades. Arts and culture? Allow me to show you our SoFA arts district and performance spaces rich with world-class artists.
In other words, submitting a response package to Amazon was really a no-brainer. This week, San Jose’s Office of Economic Development delivered a pitch for Amazon to locate its second headquarters in Northern California’s largest city. In it, we lay out space options in three areas of the city already designated for more jobs: Downtown and our emerging transit hubs, North San Jose and South San Jose.
Call it a game plan for growth, tailored to Amazon’s unique needs: At least 500,000 square feet of office space in the near term, with runway for up to 8 million square feet in the future. Add in amenities, strong transportation infrastructure, and an education system that pumps out thousands of skilled graduates every year, and we think San Jose stands a decent shot.
San Jose isn’t offering any special financial incentives, beyond what is available through the State of California and some local programs already available to any qualifying San Jose business. (For instance, the city’s Business Cooperation Program that can rebate a percentage of use tax for major out-of-state purchases; San Jose also administers the region’s Foreign Trade Zone, which can reduce, delay or eliminate duty payments on imported material.)
Instead, San Jose is promoting aspects of the city that money can’t buy: an innovative mindset, a creative and culturally diverse population, a get-things-done approach to real estate development.
Plus, the response gives the city a chance to show off aspects that don’t always get the attention they deserve, such as our trail system, arts scene and housing pipeline. Those are important elements that Amazon – and other employers – want to see when betting on a city’s ability to recruit their most important asset: talented workers.
And when Amazonians need to head to Seattle? We’re got plenty of air service – up to 16 daily flights on Southwest, Delta and Alaska out of the super-efficient Mineta San Jose International Airport. Not to mention new nonstop service to places like London, Frankfurt, Beijing and Shanghai.
As for sites, San Jose is suggesting a path for Amazon to grow that uses existing office opportunities as well as future development plans, including several already entitled projects.
One takeaway from the exercise: San Jose has several ways to meet Amazon’s requirement, which might be surprising given how “built out” Silicon Valley can appear from a distance.
For instance, in Downtown, we’ve identified a cluster of historic buildings that are slated to undergo dramatic renovations into cutting-edge creative office space. But there’s a short-term shortage of existing office space in the core downtown. So staff also pinpoints the new Coleman Highline campus – a short walk from the Santa Clara Caltrain station – which has 357,000 square feet today and capacity for up to 1.5 million square feet. Future projects – mostly on existing parking lots – promise millions of square feet of additional capacity. BART’s arrival in a few years makes downtown the most well-served part of the Bay Area when it comes to transit, something Amazon and other companies are looking for.
But downtown isn’t the only play. A clutch of recently built office buildings in North San Jose, much of it concentrated north of Highway 237, provides ample space for a major headquarters requirement. There are also several exciting redevelopment projects along North First Street that would be perfect for a large user seeking to master-plan a collaborative campus. Examples include Boston Properties’ The Station on North First, with capacity for 1.6 million square feet; and Assembly, from developers SKS and ProspectHill, which can grow to 1.3 million square feet. South San Jose also contains plenty of employment capacity, a gorgeous natural setting and a reverse commute. The area boasts some of the most attractive commercial real estate prices in the Bay Area. In the near-term, Silver Creek Business Park offers a rare large campus opportunity that can be scaled up with nearby development sites.
Amazon’s best bet for its HQ2 may just be hiding in plain sight – right where so many giants have grown, Silicon Valley.