Dive Brief:
- The San Jose, CA City Council on Tuesday unanimously approved the sale of an 11-acre swath of land to Google for the tech giant to build a 50-acre transit-oriented development of offices, shops and restaurants. The development could bring at least 20,000 employees to the Diridon Station area.
- Google will spend roughly $100 million on government-owned land, but the San Jose Mercury News says the price tag could rise to $220 million if Google purchases surface parking lots in the future. Last month, Google bought an industrial site in the development site in a $3 million cash deal.
- A memorandum of understanding (MOU) between Google and San Jose agreed to on Tuesday says Google and the city government will take “responsibility to address the housing crisis,” with at least 25% of housing be available at below-market rates.
Dive Insight:
In a Medium post and in public statements, San Jose Mayor Sam Liccardo has pitched the Google development as a major win for the city because of the potential new revenue, jobs and "indirect impacts" like businesses trying to build closer to the new development. The Google project is meant to address the city’s substandard jobs-to-housing ratio and help improve what Liccardo calls a “relatively minuscule tax base.” The availability of new residential development could help put a dent in San Jose’s housing shortage, and the offices, shops and residential space are expected to support some 5,000 jobs in addition to those Google brings in.
Business groups are also hopeful that the tech campus will provide a model for sustainable development, with infrastructure tilted towards transit and pedestrians and construction that integrates the community into surrounding green space and existing businesses.
Crucially, Google is not seeking any tax breaks or government incentives for the development, a marked difference from Amazon’s public bid process for its second headquarters (HQ2). That’s led to some observers saying San Jose could benefit more than other cities with a heavy tech presence, where rents have risen and companies have pressured governments for beneficial treatment. Urban studies expert and CityLab co-founder Richard Florida told The Mercury News that San Jose “has the opportunity to be one of the first cities to get it right” on a downtown development project.
Still, there have been complaints, especially at Tuesday’s city council meeting, that Google will eat up land and money that could have been used for more affordable housing near transit. Protesters held a hunger strike ahead of the vote and urged the government not to let housing prices rise in a city already dealing with a problem with homelessness. Police later had to remove demonstrators and arrested eight people who chained themselves to seats.
Following Tuesday’s vote, Google and San Jose will reach a developers agreement to formalize rules for the project, as well as a community benefits agreement around issues like affordable housing and an education program. Google says it hopes to begin construction in 2022.
