June 28, 2009
By Denis C. Theriault
SAN JOSE — When city officials in 2005 unveiled sweeping
plans to remake North San Jose into a "second downtown,"
they envisioned thousands of homes and millions of square
feet of high-rise, high-tech offices.
But a funny thing happened on the way to the future. Plans
for all those housing units are lying fallow amid the dismal
economy. And with the cash-strapped city now desperate for
tax dollars, officials are looking to swap a chunk of that
office space for 1 million square feet of new retail in the
area.
"There's a huge sucking sound that's coming from outside
our borders," said Councilman Sam Liccardo, whose district
reaches into North San Jose. "Part of this is about ensuring
that we can keep dollars in San Jose, working for the benefit
of our community."
Yet while some see a play to keep residents from straying
into nearby Santa Clara and Milpitas, others fear the plan
could siphon shoppers and hotel guests from downtown.
Joe Horwedel, the city's planning director, acknowledged
there are some who worry all that new retail would create
another Santana Row — the West San Jose project beloved
for its cool cachet but also criticized for stealing dollars
that could have instead gone into the city core.
So while the City Council earlier this month blessed the
concept of adding more retail and hotel space in North San
Jose, it deferred a more detailed discussion until after its
annual July hiatus. The hope was to allow residents and business
owners more time to speak up with concerns.
City planners have proposed adding big-box retailers like
Target and Lowe's and 2,000 new hotel rooms to the area north
and west of Interstate 880 and south of Highway 237.
That's a sizable expansion of the 1.7 million square feet
in neighborhood retail called for in the original plan, including
eateries, cafes and small markets.
Horwedel acknowledged that the new retail in North San Jose,
combined, would amount to three of the sprawling San Jose
MarketCenter developments on Coleman Avenue. But even so,
he said the city remains "under-retailed," and he
said all that additional space would likely be sprinkled along
the 237 and 880 corridors, with limits on how large any location
might be.
Whereas downtown ideally would boast "destination"
retail outlets for denizens of its planned high-rise condos,
Horwedel said, North San Jose would provide options more like
those at McCarthy Ranch in Milpitas.
To keep traffic in check, the city would have to give up
about 2 million square feet of industrial space. But that
still would leave more than 25 million square feet of such
space available to be developed over the next two decades
— enough for tens of thousands of new workers.
Similar restrictions would be placed on hotels, in hopes
of providing closer lodging for high-tech corporate travelers
who are currently forced to find rooms as far out as South
County. The city only has 9,000 hotel rooms and could afford
to add the space, Horwedel said, without poaching any guests
from downtown hotels.
That's a particularly sensitive topic now that the city's
downtown hotels have agreed to tax themselves to help fund
a $300 million expansion of the San Jose McEnery Convention
Center.
Scott Knies, executive director of the San Jose Downtown
Association, said he's optimistic the final blueprint will
complement downtown, but he also thinks planners could have
made things clearer when they rushed out the proposal in May.
"This is a healthy dialogue to have," Knies said.
"Growth in San Jose is not just going to occur downtown."
Horwedel said the plan to add retail and hotels to North
San Jose had been brewing for months, but it came forward
when it did for two reasons. First, Target expressed interest
in building a new store near Alviso. And several other projects
had been on hold so long he needed council permission to extend
development permits; putting together a proposal to do that
offered a natural platform to roll out the more ambitious
redesign of the area, he said.
But while council members gave Horwedel permission June 16
to extend those permits, they decided they needed more time
to determine the final extent of the other changes.
"Of course, with any long-term planning project, there
needs to be public input," said Councilman Kansen Chu,
whose district encompasses most of the planned development
area.
Chu and Horwedel plan to hold more community meetings on
the subject before the council meets again. With a chance
to boost the city's tax base amid difficult budget times,
Chu said, he's eager to find consensus.
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Contact Denis C. Theriault at dtheriault@mercurynews.com or
408-275-2002.
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