It was a helicopter tour in 1983 that took Steve Jobs and San Jose city officials around potential sites in an effort to lure the burgeoning tech company to move some of its operations outside of Cupertino. Some decades later, Apple decided it was the right time to assemble a sizable real estate portfolio for future expansion, and tonight San Jose’s city council took less than 20 minutes to unanimously approve Apple’s 86-acre development initiative on North First Street.
As The Registry has been reporting over the last year, Apple has been busy amassing tracts of land at four sites in North San Jose. Two lots were purchased from San Francisco-based Ellis Partners, where an existing structure of 290,000 square feet already sits. Another building under construction presently sits just next to it, while a fourth site known as the n1 campus is entitled for up to 2.8 million square feet. In total, when completed, Apple hopes to develop up to 4,151,350 square feet of industrial, office, research and development, manufacturing and other related and supporting uses.
Today’s city council meeting was set to approve the rezoning and master planned development permit, including amending height requirements in the development area and giving Apple a fifteen year window in vested entitlements.
“The company is moving quickly to occupy the buildings on the site and not far from the site,” said Nancy Klein, who is part of San Jose’s Office of Economic Development. “It is anticipated that they will have them fully occupied in this calendar year. Anticipating that over 1,000 employees will call San Jose their working home” as early as July of this year.
Apple has made no secret in wanting to make San Jose a bigger piece of its pie. Nearly 25 percent of its Silicon Valley workforce lives in San Jose. It is the company’s largest concentration of employees in the region.
“It’s no secret that Apple has been growing. In addition to our Infinite Loop campus and Apple Campus II, which is currently under construction in Cupertino, we now have more than 25,000 employees in the area,” said Kristina Raspe, senior director for real estate and development at Apple. “We’ve recently expanded to Sunnyvale and Santa Clara and other locations and now have over 100 buildings in [Silicon] Valley.”
As the sole company representative in front of the council, she outlined Apple’s approach to selecting San Jose. “We put a lot of effort and energy to where we go. We choose carefully, and looking at San Jose it became clear we had an incredible opportunity to accommodate a big part of our future growth here. With these acquisitions, Apple has made a significant investment in San Jose, and we look forward in establishing a significant corporate presence in San Jose,” Raspe added.
The benefits for the city could be immense, given the company’s renown and global outreach. “We conservatively estimate that approximately $15 million in annual property tax will be available to the successor agency to more rapidly retire agency debt once the site is fully developed. After the agency debt is retired, approximately 14 percent of that, or in the range of $2 million, will flow to the General Fund,” said Klein, outlining just the financial benefits for the city directly attributed to the project development.
Additional benefits, which at this point are more difficult to outline include unsecured property tax attributable to equipment as well as participation in a use-tax program, which will bring dollars directly to the city in addition to taxes outlined above.
If there was one uncertain item in tonight’s meeting it is the precise design plan for Apple’s development, which the company has not submitted to the city, yet. Council member Donald Rocha pushed Raspe for a little more insight into their plans, but she remained tight-lipped.
“The opportunity to purchase this site came very quickly to Apple, so having the opportunity to purchase 86 acres together was something we jumped on without having firm plans. We’re actually still studying the site to determine what the best uses would be for us. At this point it looks like it would be office and research & development. I can’t say anything more specifically, but it is generally what we’re looking at this time,” said Raspe.