Report paints grim picture of North San Jose redevelopment

Silicon Valley/San Jose Business Journal
Sharon Simonson
Published: March 21, 2005
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The redevelopment of North San Jose into a far denser, more urban area
supporting thousands more jobs and residents means notably dirtier air
on a local and regional basis and worse traffic congestion at 51
intersections in San Jose and three neighboring communities.

Such are some of the major conclusions contained in a nearly 500-page
draft environmental impact report issued March 10 by the City of San
Jose about its plans to re-make nearly 5,000 acres along North First
Street into a high-density, industry-centered urban village.

To help mitigate these impacts, employers in the area would be expected
to provide on-site child care and showers and lockers for workers who
choose to walk or bicycle to the office. Home builders would be prodded
to include retail in their developments to reduce resident drive-times
and to provide "telecommute centers" in or near their homes.

These and other proposed measures wouldn't do much to lessen the
negative impact on the region's air quality, however, nor is there much
to be done to prevent the even greater interstate congestion that the
development would produce, the EIR says.

Meanwhile, some North San Jose home owners, including those in
single-family homes in established suburban neighborhoods, would have
more noise and cut-through traffic as motorists use residential streets
to avoid delays on larger thoroughfares. This impact, too, would simply
have to be tolerated, because little could be done to stop it.

Frank Jesse, real estate and corporate services vice president for BEA
Systems Inc., speaking at a March 3 business community luncheon at which
city leaders explained their North San Jose plans, questioned city
assumptions that employers and employees in the area were looking mostly
for high-density, entry-level, rental housing for short-term stays.

Housing costs and the quality of kindergarten through 12th-grade
education are two of the primary issues that software maker BEA faces as
an employer in Silicon Valley, Mr. Jesse said.

"We need neighborhoods, not just housing stock," he said, noting that
developments of 55 units to an acre would not seem to encourage putting
down family roots.

In addition, he questioned the city's plans to finance more than $500
million in needed transportation improvements in the area largely with
private dollars.

At the same luncheon, city staff estimated that $7,000 would be added to
the cost of every new single-family home in the area and $5,600 would be
added to every unit in a multifamily development to pay for roadway and
other transportation upgrades. Industrial developers would face charges
of nearly $10.50 a square foot.

"What level of infrastructure costs can we expect builders to pick up?
It all goes to the price of a house," Mr. Jesse said.

The city anticipates 32,000 new homes and 83,000 new jobs in 26.7
million square feet (about 613 acres) of new industrial development in
North San Jose, according to the EIR. By way of comparison, the city is
proposing 50,000 jobs and 25,000 homes on 3,500 acres in largely
undeveloped Coyote Valley.

The city is promulgating the North First Street changes in an effort to
shore up its finances and the struggling local economy. It wants to
capitalize on North First Street's reputation as a mecca for industry
and technology by encouraging redevelopment of the area for what it
believes will be the next generation of business users.

Right now, a third of the commercial properties in the area are
obsolete, according to city officials, and will never again be occupied
by the type of tenants for which they were built -- primarily
manufacturers.

That obsolescence has led to high vacancy rates in the area, which is
undermining city finances and those of the San Jose Redevelopment
Agency, which draws a preponderance of its tax revenue from assessments
on the properties. Many of those properties have lost value.

The plan also calls for the conversion of as much as 285 acres now
earmarked for industrial use into high-density housing -- in some cases
at a minimum of 90-units to an acres. Residential developers have
clamored for sites to build homes over the last three years as record
low interest rates ignited a home-buying frenzy here and across the
country.

The North First Street revisions are part of a large mosaic of changes
that the city of San Jose is pushing for land use within its borders to
prepare for population growth and, perhaps more importantly, to
encourage private-sector re-investment.

A similar EIR is due out for downtown San Jose almost any day. That EIR
will examine the premise of expanding industrial and residential
development capacity in an enlarged downtown district.

EIRs are also being prepared for proposed redevelopment plans in
Edenvale and Coyote Valley.

This article can be found at http://sanjose.bizjournals.com/sanjose/stories/2005/03/21/story5.html