Deal clears path for South Bay developments


The cities of San Jose and Santa Clara have reached a settlement over disputes related to proposed large developments in their respective cities.

The settlement was finalized on Friday for City Place, a proposed mix of office, retail, residential and hotel spaces on a city-owned site adjacent to Levi’s Stadium in Santa Clara, and Santana West, a office and retail project on a 13-acre site at the corner of Winchester Boulevard and Olsen Drive in San Jose.

San Jose and Santa Clara opposed each other’s projects, alleging they would contribute to some of the Bay Area’s biggest issues: traffic congestion and the lack of affordable housing, according to San Jose City Attorney Richard Doyle.

Doyle said:

“The cities came to terms with a plan that I wouldn’t say solves everything, but does help to address these issues.”

According to the website of Related Companies, the company carrying out the City Place development, the location will include 5.7 million square feet of office space, 1.5 million square feet of retail room, 1,360 residential units and 700 hotel rooms. The proposal also includes a public open space and a 30-acre public park.

San Jose city officials say the Santana West project includes demolition of two movie theaters, Century 22 and 23, and an existing restaurant. In total, it will include 970,000 square feet of office space, 29,000 square feet of retail stores and a re-use of an existing theater, Century 21.

San Jose agreed to dismiss its appeal of a November judgment by San Mateo County Superior Court Judge Marie Weiner that upheld the City Place environmental impact report, while Santa Clara agreed to dismiss their challenge of the Santana West project that was scheduled to be heard by Weiner today.

The city of San Jose will be paid $4.5 million by Related Companies for the first phase of the project for traffic improvements in North San Jose, and other payments that can be reduced or eliminated by the production of both market-rate and affordable housing in Santa Clara.

The settlement for City Place does not require Santa Clara to build housing, nor does it create any financial obligation to San Jose.

The settlement demands that San Jose invest $2.5 million of traffic improvements in their city before issuance of occupancy for the first 300,000 square feet of rentable space.

It also requires that $1.2 million goes to the city of Santa Clara for traffic improvements before the issuance of that same rentable space as well as a $5 million payment to Santa Clara upon issuance of a building permit.

By July 1, 2022, that money could be used for transportation and affordable housing in Santa Clara.

In addition, San Jose guarantees that any traffic impact funds that they would waive for the Santana West project or any other developments that would affect traffic in Santa Clara would be replaced with alternative funding by the city.

A payment of a portion of Santa Clara’s attorney’s fees estimated at $145,000 will be paid by the city of San Jose.

The cities have agreed to meet regularly to discuss development and traffic issues in North San Jose that may arise as housing development increases in the area as well as addressing traffic in the Stevens Creek corridor.

Both San Jose Mayor Sam Liccardo and Santa Clara Mayor Lisa Gillmor believe that the agreement will have a positive influence on efforts toward better housing and driving environments in their cities.

Liccardo and Gillmor said in a joint statement:

“We’ve reached a fair settlement that will benefit both of our cities’ residents. … In addition to allowing these important projects to move forward, this settlement will help our two cities better address the significant affordable housing and traffic congestion problems gripping our region and provide higher quality of life for our residents, employees and visitors.”

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