San Jose to Consider Google’s $110MM Proposal for Diridon Station Land

San Jose, Google, Diridon Station, Adobe, Station Area Advisory Group, Northern California

Purchase & Sale Agreements and Memorandum of Understanding, informed by community engagement process, are critical steps in development of transit-oriented project Downtown

SAN JOSÉ, Calif., (Nov. 16, 2018) – At the December 4, 2018 City Council meeting, the proposed Memorandum of Understanding (MOU) and Purchase and Sale Agreements (PSA) developed by the City with Google LLC will be presented for consideration. Together, the documents provide a framework for a regionally significant, potential transit-oriented development project near San José’s Diridon Station. While no specific project plan has been proposed, approval of these agreements will mark a key milestone in the approval process towards potential development of the Diridon Station Area project by Google. The documents are posted here –

“After eight months of extensive and transparent public engagement, we look forward to continuing this process with Google to bring transit-connected jobs and vibrancy to Downtown San José,” said San José Mayor Sam Liccardo. “Google will pay full freight for land, taxes, fees, and additional community benefits like affordable housing, in stark contrast to other cities handing out billions in local tax dollars to attract big companies. We offered Google no subsidies, and they didn’t ask for them.”

Purchase and Sale Agreements
The Purchase and Sale Agreements (PSA) outline the specifics on Google’s purchase of:

  • Five sites originally purchased by the San José Redevelopment Agency and formerly owned by the Successor Agency to the Redevelopment Agency (SARA). These five sites, made up of nine individual parcels, total about 6.3 acres. Currently, these sites are mainly surface parking lots serving transit users and SAP patrons. The price for these sites is $67 million ($237.50 per square foot).
  • Two sites (made up of seven individual parcels) owned by the City of San José and comprising about 15 acres. One is the Fire Training Site—4.1 acres with several aging buildings used for training firefighters, which the city has long-planned to relocate and replace. The purchase price for the Fire Training Center is $42.9 million ($237.50 per square foot).
  • Also in the package is a recommended option for purchase of Lots A/B/C; which lies to the west of the SAP Center, is currently used for SAP patron parking, and is roughly 10.8 acres.

“Unlike many other South Bay cities, San José does not have enough jobs for our very large resident population,” said Dave Sykes, City Manager. “This makes San José the most fiscally challenged city in the South Bay, and this causes lengthy commutes for residents. We appreciate having a major company such as Google willing to invest in Downtown and partner to achieve City development goals for the Station Area.

Map of Purchase/Option properties

City/Google Memorandum of Understanding (MOU)

The Memorandum of Understanding reflects the City’s and Google’s vision and shared goals for the Diridon Station area, and will guide the formal project planning and approval process. An MOU is an outline of mutually accepted terms and expectations between parties as they work toward a common objective. It is a common first step before a more specific, legally binding agreement.

The MOU identifies 15 broad goals for the project:
1. Create a Balanced Development.
2. Capitalize on Transit Synergy.
3. Optimize Density and Mix of Uses.
4. Grow and Preserve Housing.
5. Create Broad Job Opportunities.
6. Pursue Equitable Development.
7. Design for Human Scale.
8. Enhance and Connect the Public Realm.
9. Pursue Excellence in Design.
10. Maximize Use of Public Transit and Minimize Parking.
11. Pursue Excellence in Transit Access and Operations.
12. Optimize Sustainability.
13. Be Open to Innovation.
14. Proceed with Timely Implementation.
15. Participate in Fair Share Development.

Anticipated benefits to San José from potential development of the Diridon Station Area are numerous, including; at least 20,000 permanent jobs and 1,500 construction jobs annually during build-out; thousands of new homes, including affordable; new tax revenue for city services and schools; new parks, public spaces and infrastructure upgrades; and ongoing benefits from increased transit use such as shorter commutes, reduced congestion, and pollution prevention.

Chart of Phase I proposed Google
project planning
Chart of Phase II, proposed Google project planning

The MOU affirms the City and Google’s intent to negotiate a Development Agreement as part of the project approval process. The Development Agreement will include a Community Benefits Plan that would include a negotiated payment to support community investments over and above City project requirements. Major categories of community priorities would be considered, based on input received to-date as part of the City’s
extensive Civic Engagement efforts. The categories include:

  • Affordable housing, displacement prevention and mitigation;
  • Education, workforce training, and career opportunities;
  • Small-business opportunity;
  • Historic and cultural preservation, public art;
  • Public space, trails, and mobility;
  • Community nonprofit support, including homeless services; and,
  • Habitat and environmental sustainability

“We have waited 25 years for a second major tech company after Adobe to be willing to invest in developing our Downtown,” said San José’s Director of Economic Development Kim Walesh. “With this step, we are moving ahead with the sale of property to Google at fair market value or better, resulting in what we hope will be a national model for a transit-oriented development – and with no subsidies.”

The City’s Community Engagement process included the appointment by the City Council of a 38-member Station Area Advisory Group, which has been meeting monthly. Between March and the end of October 2018, the City had hosted10 meetings of the Station Area Advisory Group (SAAG), 11 SAAG solution group (subcommittee) meetings, four community forums, eight stakeholder meetings/presentations (with specific groups), two walking tours, and six pop-up booths at neighborhood events. In addition, the website has had more than 18,000 page views, with 600 people completing an online feedback form. Shared goals outlined in the MOU were informed by the City’s community engagement commitment.

Next Steps
Project planning, design, and review of a potential Google development is expected to take at least two years after Google submits a planning application. During this time, the Development Agreement will be negotiated for Council consideration, and community engagement will continue. City Council will have ultimate approval of a project through its authority to certify the environmental impact report, amend General Plan land uses,
amend the Diridon Station Area Plan, approve Rezoning and Development Permit, and approve the Development Agreement, which will include a Community Benefits Plan.

About the City of San José
With more than one million residents, San José is one of the most diverse large cities in the United States and is Northern California’s largest city and the 10th largest city in the nation. San José’s transformation into a global innovation center has resulted in one of the largest concentrations of technology companies and expertise in the world. In 2011, the City adopted Envision San José 2040, a long-term growth plan that sets forth a vision and a comprehensive road map to guide the City’s anticipated growth through the year 2040.

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