City of San Jose wheels and deals for tech growth, Google v…
SAN JOSE >> San Jose officials intend to orchestrate multiple property deals that the city hopes will bring more tech companies to north San Jose, create a more enjoyable experience at Avaya Stadium, and pave a smoother path for development of a Google transit village downtown.
The city wants to sell land near the Coleman Highline complex across from San Jose International Airport in a deal the municipality hopes will trigger major new leases at the office, hotel and retail project; increase parking for Avaya Stadium soccer games and other events, as well as for tech tenants at Coleman Highline; and sweep away some potential impediments to land needed for the Google complex in downtown San Jose.
“We are helping out with economic development at Coleman Highline with this property sale,” Nanci Klein, San Jose’s deputy director of economic development, said Monday. “It also helps lift a cloud that could hang over some of the Diridon (government-owned) sites” in downtown San Jose.
City staffers have recommended that San Jose sell to the Coleman Highline property owners some city-owned land next to the complex so that the project developer, Hunter Properties, can build thousands more parking spaces, which would benefit Avaya Stadium event attendees as well as people working or shopping at the Coleman Highline site.
“The sale price is $24.8 million, or $45 per square foot of land,” Kim Walesh, the city’s economic development director, wrote in a memo prepared for the a City Council meeting on Tuesday.
How do the Google village sites in downtown San Jose tie into all this?
John Fisher, a majority owner of the Oakland Athletics baseball team and a part-owner of the San Jose Earthquakes soccer club, which plays at Avaya Stadium, also is a primary partner in the Coleman Highline complex with Hunter Properties. Fisher, in addition, is principal owner of Athletics Investment Group, which controls options on key parcels in downtown San Jose that at one time were being set aside for an Oakland A’s baseball park. The A’s stadium project eventually evaporated.
San Jose officials now want to use those sites to bolster Google’s plans for a transit-oriented community near the Diridon train station where 15,000 to 20,000 of the search giant’s employees would work. The deal would oblige Fisher to relinquish his interests in the choice downtown San Jose parcels.
“As a condition to sell to John Fisher the land on Coleman Avenue, he is being required to release his options on the Diridon station properties,” Klein said.
The sale of the city land at Coleman Highline is scheduled to be completed by the end of this year. The proceeds from that sale would potentially be deployed to pay for city-owned soccer fields.
Two big tech companies, Roku and 8×8, have leased big chunks of office space at Coleman Highline. Roku in August leased 472,000 square feet, a deal whose options would take the company’s commitment to 600,000 square feet. In January, 8×8 in January leased 162,000 square feet.
“Coleman Airport Properties has commitments for 760,000 square feet of the 1.5 million square feet of office and research space entitled for the site,” Walesh wrote in the memo. “Coleman Airport Properties is in discussions with other tenants that could achieve the full build out” of the project.
The additional parking makes it easier for Coleman Airport Properties to attract tenants for the remaining 740,000 square feet of space at the site.
“Without access to the additional land, the developer will likely under build the office component of the site by 350,000 to 400,000 square feet to retain more surface parking or build larger parking garages,” according to the city memo.
Without the additional parking spaces, office workers, retail patrons and hotel guests could have encountered increasing difficulties in accessing both Coleman Highline and Avaya Stadium, city officials warned.
“Almost half of the office site would have to clear out by 6 p.m. to accommodate the obligation to provide 5,000 parking spaces on a game night,” Klein said. “That is a significant obligation. Because of traffic concerns, it is common that a number of patrons arrive by 5 p.m.”