If you do business in northern Cali . . .
Steve’s breakdown: There are big plans, big business and big money flowing into North San Jose. Companies like Samsung and Polycom have already gone all-in so look into it because your next client could be moving in.
SAN JOSE, CA: For decades a zone of low-slung research-and-development buildings, North San Jose is being transformed into an urban transit village and tech hub.
City officials envision thousands of new housing units, millions of square feet of new office and research spaces and additional retail, restaurants and recreation spaces — all served by BART and light rail. Their hope is that North San Jose will become the bustling heart of Silicon Valley.
“North San Jose will become more of a place where you can live and also work, and a place that is much more walkable,” said San Jose Mayor Chuck Reed, who often is credited as the chief architect of the emerging, denser north side. “You can get people closer to work. They don’t have to drive as far.”
After nearly 10 years of planning and preparation, the first steps of the transformation of 5,000 acres in North San Jose are coming into view. The city’s economic development staff estimates that $2.8 billion worth of new projects are underway there or about to start.
City officials envision 26.7 million square feet of additional office and research space coming to North San Jose in the next 15 years, along with 32,000 more housing units, 2.7 million square feet of retail and 550 new hotel rooms.
The ambitious plan would add office space equivalent to the size of 10 to 15 Valley Fair shopping centers. It would increase office and research space on the north side by 58 percent, nearly double the amount of retail, raise the number of hotel rooms by 20 percent, and more than triple the number of residential units, according to city estimates.
But crucial to the city’s success in transforming North San Jose will be attracting high-profile companies. That effort recently got a boost when Samsung broke ground on what is expected to be an iconic campus on First Street near East Tasman Drive. The complex will be dominated by a pair of 10-story office towers and total 680,000 square feet.
That followed the move last year of Polycom, which relocated its headquarters from Pleasanton to a site near Highway 237 and Great America Parkway.
Samsung says its new campus will include both “urban” and “garden” areas. Set alongside the light-rail system, the campus will feature a large “city plaza” of stone pavers, water features and large-scale art elements. A “sports garden” will feature native trees, sports courts and clearings. About 2,000 Samsung employees are expected to work at the complex once it opens in 2015.
“The new campus will consolidate a number of Samsung organizations within one building, while helping to accommodate the rapid growth that we are planning in Silicon Valley,” said Chris Goodhart, a spokeswoman for Samsung. “This prime location will allow us to continue to draw from talent throughout Silicon Valley.”
Kim Walesh, San Jose’s director of economic development, said the new Samsung campus “is the perfect project to signal what the new North San Jose will be all about. It is dense, it is walkable, they are new-generation buildings.”
But the biggest game changer on the drawing boards for North San Jose is the proposal by realty firm Peery Arrillaga to develop a 2 million-square-foot complex of 10 buildings of seven stories each where up to 10,000 people could work.
“Peery Arrillaga is moving as fast as they can to prepare for this project,” the mayor said. “We think they will get their basic permits in January and start construction shortly thereafter.”
To encourage more projects and corporate expansions in North San Jose, city officials have slashed development fees, cut red tape for developers and are allowing higher density than was previously permitted.
In addition to new development, several builders, including Bixby Land, are renovating existing office properties that have attracted new tenants to North San Jose, including Nimble Storage.
“Higher density is the future, and if the demand is there, then it makes sense to build more in North San Jose,” said Chad Leiker, a vice president with realty firm Kidder Mathews. “San Jose is betting on light rail and on BART to really make this work.”
Little opposition to the build-out of North San Jose has emerged in recent years, although the neighboring towns of Santa Clara and Milpitas, along with Santa Clara County, sued San Jose in 2005 over the anticipated traffic congestion the new developments would create beyond San Jose’s borders. A 2007 settlement obliges San Jose to widen Montague Expressway, including sections in Santa Clara and Milpitas.
“The judge ruled cities have a responsibility to coordinate with each other and make a good-faith effort to mitigate impacts in other jurisdictions,” said San Jose Transportation Director Hans Larsen.
While that challenge was resolved, others remain. City Councilman Kansen Chu, whose District 4 includes North San Jose, said the area is caught in “kind of a chicken-and-egg game.”
He said the area needs more stores, shops and other retail businesses for it to be attractive to residents, and at the same time needs more residents to make the area attractive to retailers.
Another challenge is stiff competition for tech companies from Palo Alto, Sunnyvale, Mountain View and Santa Clara. But San Jose officials hope the north side’s plentiful land will give the city an edge.
“The idea is to create a there there,” said Nanci Klein, San Jose’s deputy economic development director. “There should be a central place for Silicon Valley. And it makes sense for North San Jose to be the center of that.”