Santa Clara Unanimously Approves Related’s $6.7B City Center Project

Following a deliberation that lasted over four hours, the city council of Santa Clara gave the Related Companies the go-ahead it had been seeking for almost four years—the right to redevelop a 239-acre landfill in the northern part of the city into a mega development that at completion could include 5.4 million square feet of office, 1.1 million square feet of retail space, 1,680 residential units, 700 hotel rooms, 250,000 square feet of food & beverage space and 190,000 square feet of entertainment space. The City Center project promises to be the largest project the Silicon Valley city has ever embarked on, and the final meeting, not unlike the entire process that preceded it, was challenged to the very last minute.

The meeting opened with City Manager Rajeev Batra describing the project in some detail, outlining the process the developer has undertaken with the city, as well as providing a comprehensive overview of the fiscal benefits for the city. In all, the New York-based developer is looking to spend $6.7 billion in total development cost, of which approximately $5 billion would be for construction only. The city of Santa Clara stands to gain nearly $17 million annually in net general funding alone once the project is fully completed, according to Batra.

During Related’s portion of the presentation, the fiscal benefits were summarized at $114 million in total annual recurring revenue to various jurisdictions in Santa Clara at completion. That includes estimated annual allocations of $41 million to the city, $33 million to the school district, $17 million to the county and $14 million to the VTA in addition to an estimated growth in ridership of 52 percent.

“It’s very exciting times, I’m very pleased to present to you one of the biggest projects in the city of Santa Clara,” said Batra as he opened the meeting on Tuesday evening. His presentation to the council concluded with a resounding recommendation to the city council that that the project be approved.

That approval would come after four hours of discussions and evidence that a few lingering issues were still unresolved.

The city of San Jose, for one, sent one of its city attorney deputies to voice San Jose’s disproval of the project and object to the way Santa Clara managed the communications of the review process.

“There are significant environmental impacts,” said Senior Deputy City Attorney Vera Todorov during the public comment portion of the evening. “For example, the DDA that you’re considering tonight was first made public a couple of days ago. It’s 625 pages long.” Todorov explained that this was insufficient time for the public to review and comment on the project details. But that was just one of San Jose’s grievances.

“[Santa Clara’s] consideration of this project will create dramatically more jobs than housing units in a region that is already suffering from a serious housing shortage. It flies in the face of responsible planning and environmental stewardship,” said Todorov. “The project will require San Jose to bear the burden of providing housing and other municipal services to project employees.”

In closing, Todorov asked the city council to take a step back from the decision and review further options it could take with San Jose and neighboring municipalities.

Senior Planner at Santa Clara Valley Transportation Authority, Melissa Cerezo, also voiced her agency’s objections to the project

“VTA has provided consistent and clear input to the city regarding the projects implications for transportation and mobility. VTA submitted comment letters on the traffic and final environmental impact report, and provided public testimony at all five public City Place public sessions and the June 8th public planning commission hearing,” said Cerezo.

Cerezo went on to say that the VTA had been requesting from the city of Santa Clara to assist in transportation safety planning, signal monitoring and maintenance during the construction of the development. “VTA generally supports intensified development near core transit and works with agencies and the developers to help address transportation demands and impacts of redevelopment. However, VTA continues to have significant concerns that have not been addressed,” she added.

Cerezo outlined specifics around the transit center improvements that the VTA would like to see, including improved safety measures surrounding streets and direction of traffic.

The final looming issue was the amount of money the developer was willing to commit to the school district. Representatives from the Santa Clara Unified School District presented the to the city and the developer a counter offer letter to settle a number of open items, and voiced a general appreciation for the work Related had done up to that point.

“This is a tremendous project, things are not perfect, they’re not all what we’d like to be, but I think that we’re close enough,” said vice mayor Teresa O’Neill, concluding her remarks. “I’m going to be optimistic and say let’s go ahead and do this, but we have to realize there’s still many areas to work on.”

“The school district hired a consultant to do a study to figure out how many new students City Place would generate, and it was less than 30 students,” said council member Pat Kolstad. “The Related Corporation volunteered to give double the money that is required by law to the school district for their upfront funds.”

He outlined all the funds the district would be receiving in addition to the tax revenue they would receive annually. “This is more than fair and incredibly generous what this developer is doing for the schools, anything beyond that would be really egregious and unfair,” Kolstad concluded.

He also highlighted the money the VTA would be receiving from Related, which was pegged at $17.5 million in addition to the funding the transportation agency will be getting from property taxes and concluded that it would not be appropriate to put additional financial burdens on this single developer in one city.

Council member Kathy Watanabe added, “What I have appreciated over the years is how the Related Company has listened. Every time that a question has come or concern what direction to go, they made sure to reach out to so many of the community to be able to get feedback, and I think that’s really important. They’ve been transparent and open about their plans.”

“We’re doing our share,” said Mayor Lisa Gillmor. “We don’t have the housing imbalance [San Jose does]…but that was their choice, and that’s their community that they planned. We know Santa Clara is a very attractive community, we know over the years our forefathers and mothers put in the infrastructure in our city to encourage business. We can’t help that we’re so attractive!”

This project will be great project for city, she added. And while she acknowledged that San Jose officials have been communicative, she presented a thick file of documents that had been delivered to her office just hours before the meeting. It was the neighboring city’s last ditch effort to influence the decision and a project that will greatly benefit Santa Clara, and none of the council members seemed to appreciate that gesture by San Jose’s attorneys.

All the council members spoke in favor of the project and jointly praised Related for their efforts to close the gaps that were identified during the approval process. In the final minutes of the evening the council voted unanimously and approved the development.